Momentum mutual funds are dominating fast market, know the top 3 names for investment

Momentum Investing is a strategy in which the price is increased continuously in those shares. It is believed that if the price of a stock is going up, then it will continue to go up for some time. In this strategy, not only the performance of the company is seen, but also take into account the thinking and market perception of investors. However, this method is not completely stable because shares that are performing well today can also be weak tomorrow.

Why did Momentum Funds Demand?

In the last few years, there has been a tremendous rise in the Indian stock market. For this reason, the popularity of Momentum Mutual Funds has also increased rapidly. Many asset management companies have launched funds that are either actively managed or index based. The special thing is that active Momentum Funds have not been able to complete even two years, so here we have talked about those funds which have been going on for more than two years and have done well.

Edelweiss Nifty Midcap150 Momentum 50 Index Fund

Launched in November 2022, this fund follows Nifty Midcap150 Momentum 50 Index. Its purpose is to invest in 50 midcap companies whose performance has been excellent in recent months. This fund has given a return of about 30.9 percent in two years, which can be considered very good.

However, its performance has been slightly lower than the benchmark, as the benchmark gave 31.8 per cent CAGR due to trekking error. This fund mainly includes stocks like BSE, Max Healthcare and Coforge. Sector Wise, Finance, Healthcare and IT contribute the most.

Tata Nifty Midcap 150 Momentum 50 Index Fund

The fund was launched in October 2022 and its purpose is also similar to the fund with edelweiss. It also tracks Nifty Midcap 150 Momentum 50 Index and focuses on the Momentum of midcap companies. This fund has given a CAGR return of 30.3 percent in two years. However, the tracking error was a little higher in this fund, due to which its return was 1.6 percent less than the benchmark.

UTI Nifty200 Momentum 30 Index Fund

This fund is the oldest and largest in this category, whose AUM is around Rs 8,059 crore. This fund tracks Nifty200 Momentum 30 Index and selects 30 companies from within NIFTY 200 with the highest momentum scores. The big thing about this fund is that about 89 percent of its investment is in largecap stocks. It has given 22.6 percent CAGR return in two years. Its top holdings include names like Bharti Airtel, Mahindra & Mahindra and Divi’s Labs.

What to think before investment?

Momentum mutual funds have the possibility of good returns in the fast market, but their performance may weaken at the time of the market fall. Also, they also have high risk, especially when they invest in midcap and high-volatility stocks. Since the performance of these funds can change rapidly, understand the ability to take your risk and the duration of investment before investment.

Disclaimer: (Information provided here is being given only for information. It is necessary to tell here that the investment market is subject to risks. Always consult expert before investing as an investor. Never is advised to invest money from Abplive.com.

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