The condition of Momentum Funds, which is rich in investors, is bad today. The decline in the market for the last 5-6 months has brought these funds to the ground. The NAV of Momentum Funds giving double returns from the Nifty 50 index fund has fallen more than 20 percent in three to six months. About 20 Momentum Funds have to lift a lot of loss. Momentum funds typically invest in shares usually in which there is a recent boom. Experts say that Momentum Investing is beneficial in the bullish market. However, the performance of these funds starts falling as soon as the correction starts.
Most falling Momentum Funds
The most fallen Momentum funds include Bandhan Nifty 500 Momentum 50 Index, Motilal Oswal NIFTY 500 Momentum 50 ETF, Nippon India NIFTY 500 Momentum 50 IndEX and MOMENTUL NIFTY 500 Momentum 50. In the last three months, the NAVs of these funds have fallen more than 27 percent. Tata Nifty Midcap 150 Momentum 50 Index Fund, Edelweiss Nifty Midcap 150 Momentum 50 Index and Kotak Nifty Midcap 150 Momentum 50 IndEX NAV has fallen more than 24 %. The rest has fallen by 13 to 23 percent.
Will have to wait for recovery
Experts say that investors of Momentum Fund may have to wait for recovery for the next quarter or the second half of the next financial year. Independent analyst Deepak Jasani said that Momentum Investing is fine in the bullish market, but it loses in the fall. These funds select shares for investment on the basis of technical analysis compared to fundamentals. Since, midcap and smallcap stocks have declined in the last 4-5 months, which has affected the performance of Momentum Funds.
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It takes time to adjust with market status
Nirav Karkera, the research head of Fisadam, said that many Momentum Funds have invested in stocks whose agargeet beta was at a high level. Such stocks are quite sensitive about market bicycles. The portfolio of such stocks gives very good returns in the fast bicycle. However, the situation in the Baishi market vomits. Experts say that passive managed Momentum funds take time to adjust according to the market position. In comparison, actively make necessary changes according to the status of the managed fund market.