2 months ago
Active Momentum Funds Outperform Markets Amid Volatility
Active momentum funds are a type of investment that tries to pick the best performing stocks quickly.
They use computer models and research to decide when to buy or sell.
In the last six months, these funds earned 9% on average, while the big Nifty 100 index lost about 3%.
The managers can change their holdings anytime, keep some cash, and limit how big each stock is.
This helps them stay safe when the market drops and still make money when it goes up.
Experts say these funds work best as a small part of a larger portfolio, not the main part.
They are especially useful when the market is very unpredictable.
By watching trends and adjusting quickly, they can beat the overall market.
This makes them a good option for investors who want to try to beat the market during tough times.
Active momentum funds earned 9% over the last six months versus -2.8% for the Nifty 100 TRI.
They use active rebalancing, quantitative models, and qualitative research to capture relative strength.
Popular strategies include multi‑factor blends, quality‑momentum blends, and satellite allocation.
Fund managers can adjust positions, hold cash, limit size, and mix factors to manage risk.
Momentum investing is cyclical; experts recommend using it as a satellite allocation, not the core portfolio.
- Who
- Active momentum fund managers and investors
- What
- Active momentum funds outperform the Nifty 100 TRI during volatility
- Where
- Indian equity markets
- When
- Last six months
- Why
- To capture upside and preserve capital amid market swings
Key facts
- Average Return (6 months)
- 9%
- Nifty 100 TRI (6 months)
- -2.8%
- Popular Strategies
- Multi-factor blends, Quality-momentum blends, Satellite allocation
- Key Feature
- Active rebalancing and risk controls
- Best Use
- Satellite allocation, not core portfolio
Quotes
Sonam Srivastava
Founder, Wright Research PMS
“"By combining quantitative models with active risk controls, these funds preserve capital during corrections while capturing upside when leadership changes, resulting in meaningful outperformance over broader market benchmarks."”
financialexpress.com
“"Active momentum funds allow fund managers to select stocks using a combination of quantitative models and qualitative research, enabling quicker responses to changing market conditions and better risk management."”
financialexpress.com
Sources
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