Neutral impactEconomy
Riding the wave: Active momentum funds beat market volatility — what’s the strategy?
livemint.com 1 hr ago·10 Aug 2026, 5:18 pm
Economy livemint.com
Active momentum funds aim to generate returns by buying stocks that have recently performed well and selling those that have lagged. This strategy relies on the idea that past price trends can signal future performance, allowing the fund manager to ride the wave of strong market moves. During periods of high volatility, this approach can help the portfolio stay aligned with the prevailing market sentiment, potentially offering a smoother ride compared to static portfolios.
For investors, this strategy matters because it attempts to capture upside in rising markets while limiting exposure to declining assets. It offers a dynamic way to manage risk, but it requires the fund manager to make timely decisions. The performance of these funds can vary significantly depending on the manager's skill in identifying trends and executing trades.
Investors should watch how the fund manager defines 'momentum' and the specific sectors they are targeting. It is also important to review the fund's historical performance during different market cycles to understand its risk profile. Since this is an active strategy, fees can be higher, so investors should ensure the potential benefits justify the costs.
Key takeaways
- Category: Economy.
Why it matters
A routine update. Use the price and stock snapshot to gauge how the market is responding.
