Best Momentum Funds in India for 2025
Momentum funds are mutual funds that invest in stocks showing strong recent price trends, aiming to benefit from their continued performance. Momentum funds primarily focus on stock price trends and recent performance patterns. In India, options include momentum index funds, actively managed funds, and thematic variants. This article explains how these funds work, their features, benefits, risks, and key factors to consider.
Best Momentum Mutual Funds in India
| Name | AUM | CAGR 3Y | Expense Ratio | Absolute Returns - 1Y | Absolute Returns - 3M | Absolute Returns - 6M | Alpha | NAV | Exit Load |
|---|---|---|---|---|---|---|---|---|---|
| UTI Nifty200 Momentum 30 Index Fund | 8,131.01 | 16.23 | 0.45 | -17.16 | -2.89 | 10.22 | 9.06 | 20.91 | 0.00 |
| Quant Momentum Fund | 1,628.59 | 0.00 | 0.95 | -12.95 | -4.36 | 8.39 | 0.73 | 14.07 | 1.00 |
| Axis Momentum Fund | 1,308.29 | 0.00 | 0.54 | 0.00 | -1.52 | 13.41 | 8.69 | 9.05 | 1.00 |
| ICICI Pru Active Momentum Fund | 1,150.53 | 0.00 | 1.01 | 0.00 | 0.00 | 0.00 | 0.00 | 10.03 | 1.00 |
| Edelweiss Nifty Midcap150 Momentum 50 Index Fund | 1,141.66 | 0.00 | 0.38 | -8.60 | -3.73 | 14.49 | 6.05 | 17.77 | 0.50 |
| Tata Nifty Midcap 150 Momentum 50 Index Fund | 957.47 | 0.00 | 0.43 | -8.72 | -3.74 | 14.51 | 6.01 | 17.74 | 0.25 |
| Nippon India Nifty 500 Momentum 50 Index Fund | 947.24 | 0.00 | 0.25 | 0.00 | -5.45 | 10.27 | 11.62 | 7.95 | 0.00 |
| Motilal Oswal Nifty 200 Momentum 30 Index Fund | 929.62 | 15.93 | 0.32 | -17.51 | -3.06 | 9.98 | 8.88 | 15.10 | 1.00 |
| Samco Active Momentum Fund | 861.32 | 0.00 | 0.87 | -10.37 | -3.05 | -1.48 | 1.32 | 14.00 | 1.00 |
| Motilal Oswal Nifty 500 Momentum 50 Index Fund | 710.51 | 0.00 | 0.41 | 0.00 | -5.24 | 10.53 | 11.75 | 7.94 | 1.00 |
Disclaimer: Please note that the above table is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing. The data is derived from Tickertape Stock Screener and is subject to real-time updates.
Note: The data on the list of the momentum funds is from 8th September, 2025. This data is derived from the Tickertape Mutual Funds Screener.
Selection Criteria:
- Category – Equity
- Plan – Growth
- AUM – Sorted from Highest to Lowest
🚀 Pro Tip: You can use Tickertape’s Mutual Fund Screener to research and evaluate funds with over 50+ pre-loaded filters and parameters.
Overview of Top Momentum Funds in India
UTI Nifty200 Momentum 30 Index Fund
UTI Nifty200 Momentum 30 Index Fund tracks the Nifty200 Momentum 30 Index. It selects 30 stocks with strong price momentum. With an AUM of over ₹8,000 cr, the fund tracks momentum investing in large and mid-cap companies and has a relatively lower expense ratio compared to many active funds.
Quant Momentum Fund
Quant Momentum Fund actively manages its portfolio by investing in stocks with strong price trends. It frequently rebalances using momentum indicators to capture market opportunities. The fund follows a dynamic, rule-based strategy with relatively higher portfolio turnover compared to traditional index strategies.
Axis Momentum Fund
Axis Momentum Fund uses quantitative models to find stocks showing sustained strength. It offers active management and more flexibility in stock selection compared to index-based schemes. The fund combines systematic rules with manager oversight to seek better outcomes, but results depend on market cycles and manager decisions.
ICICI Prudential Active Momentum Fund
ICICI Prudential Active Momentum Fund invests in companies with strong recent performance by blending quantitative filters with active calls. With an AUM of over ₹1,100 cr, it frequently rebalances to stay exposed to rising stocks. Costs and volatility for this strategy may differ from those of momentum index funds.
Edelweiss Nifty Midcap150 Momentum 50 Index Fund
Edelweiss Nifty Midcap150 Momentum 50 Index Fund mirrors the Nifty Midcap150 Momentum 50 Index by investing in 50 mid-cap stocks with strong momentum signals. It offers systematic exposure to mid-cap companies and has an AUM of about ₹680 cr with a competitive expense ratio. Its performance links closely to mid-cap market cycles.
Tata Nifty Midcap 150 Momentum 50 Index Fund
Tata Nifty Midcap150 Momentum 50 Index Fund tracks the same mid-cap benchmark, focusing on 50 stocks with high momentum. With an AUM of ₹619 cr, it provides systematic access to mid-cap momentum investing. Costs are relatively low, though mid-cap volatility makes returns less predictable compared to large-cap momentum funds.
Nippon India Nifty 500 Momentum 50 Index Fund
Nippon India Nifty500 Momentum 50 Index Fund tracks the Nifty500 Momentum 50 Index, offering diversified exposure across large, mid, and small caps. Investing in 50 high-momentum stocks provides broader market participation. With a larger stock universe, it captures more opportunities but may also face wider volatility swings.
Motilal Oswal Nifty 200 Momentum 30 Index Fund
Motilal Oswal Nifty200 Momentum 30 Index Fund replicates the Nifty200 Momentum 30 Index. With ₹871 cr in AUM and an expense ratio of 0.32%, it provides low-cost, passive access to momentum investing. The fund invests in 30 large- and mid-cap companies with recent outperformance trends.
Samco Active Momentum Fund
Samco Active Momentum Fund is an actively managed equity scheme that uses a systematic model to capture ongoing price trends. With an AUM of ₹861 cr, it involves frequent rebalancing and higher portfolio turnover. The fund follows a momentum-driven strategy, which can result in more frequent portfolio changes compared to traditional index-based approaches.
Motilal Oswal Nifty 500 Momentum 50 Index Fund
Motilal Oswal Nifty500 Momentum 50 Index Fund follows the Nifty500 Momentum 50 Index, investing in 50 momentum-driven stocks across large-, mid-, and small-cap categories. With diversified exposure and low costs, it offers a broad-based approach to momentum investing, though returns vary significantly depending on market cycles and sector trends.
Disclaimer: The AUM is updated as of 3rd August, 2025. Please, do your own research before investing in the mutual funds.
What is a Momentum Fund?
Momentum funds are mutual funds that invest in stocks showing strong recent price trends instead of focusing only on fundamentals. The idea is that rising stocks may continue to gain while weaker ones may keep underperforming.
Taxation on Momentum Funds
Since many momentum mutual funds in India are equity-oriented (index funds or active equity funds), their taxation follows the rules for equity mutual funds as per the 2024 Union Budget.
| Capital Gains Type | Holding Period | Tax Rate (Budget 2024) | Notes |
| Short-Term Capital Gains (STCG) | Less than 12 months | 20% | Applies if units are redeemed within 1 year. |
| Long-Term Capital Gains (LTCG) | More than 12 months | 12.5% flat (up to ₹1.25 lakh per year tax-free) | No indexation benefit available. |
Dividends from Momentum Funds
Any dividends received are taxed according to the investor’s income tax slab. Since momentum funds often involve short-term rebalancing, taxation can have a higher impact if units are sold frequently within a year.
How to Invest in Momentum Funds?
You can easily start to invest in momentum funds by following these steps:
- To invest in the best momentum mutual funds, you can visit a mutual fund investment platform such as smallcase.
- The next step is to research and identify the momentum mutual funds that match your financial goals. Tools like the Tickertape Mutual Fund Screener can help you filter and compare funds based on parameters such as returns, expense ratio, and fund size.
- Once you shortlist the funds, visit smallcase, log in, and search for the fund by name. You can then choose the investment mode, either a one-time lump sum or a momentum mutual fund SIP, and complete the process.
Advantages of Investing in Momentum Funds
- Captures Market Trends: Momentum funds aim to benefit from ongoing price movements, allowing investors to participate in short- to medium-term market opportunities without tracking individual stocks daily.
- Diversification: Momentum mutual funds spread investments across multiple stocks and sectors, reducing the risk of relying on a single company’s performance.
- Accessibility: Even small SIP contributions allow investors to access momentum investing mutual funds, making them available to a wide range of participants with different budgets.
- Professional Management: Active momentum funds are managed by experienced fund managers, while momentum index funds follow well-defined benchmarks, ensuring structured investment execution.
- Flexibility Across Variants: With options like momentum preservation funds and momentum balanced funds, investors may consider momentum strategies aligned with their risk preference and time horizon.
Risks of Investing in Momentum Funds
- High Volatility: Momentum funds invest in stocks with strong recent performance, which can reverse quickly. Sudden market changes may cause sharp fluctuations in fund value.
- Market Dependency: Momentum funds aim to track stock price trends, which can work differently depending on market conditions. In range-bound phases, returns may fluctuate and can be less consistent than in strongly trending markets.
- Frequent Portfolio Changes: Momentum-based mutual funds often involve relatively higher portfolio turnover due to their strategy of tracking price trends. Frequent buying and selling may increase costs and affect overall tax efficiency for investors.
- Short-Term Nature: Momentum strategies may focus on short- to medium-term gains rather than long-term fundamentals. This can make them less predictable compared to value or growth investing approaches.
- Risk of Underperformance: While some funds may appear as the best momentum funds in strong markets, they can underperform significantly during downturns or when momentum fades.
- Concentration Risk: Certain momentum index funds may be concentrated in specific sectors like technology or finance, which increases exposure to sector-specific risks.
Factors to Consider Before Investing in Momentum Funds
- Investment Horizon: Momentum funds typically follow strategies aligned with short- to medium-term market trends. Since performance depends on market trends, investors need to consider whether their goals align with this timeframe.
- Risk Appetite: These funds can be volatile, as momentum strategies may experience sharp swings in performance depending on market trends.
- Market Conditions: Momentum strategies are designed to track price trends, which can sometimes benefit from sustained bullish phases. However, quarterly rebalancing means they may not always capture short-term spikes or abrupt changes.
- Fund Costs: High turnover in active momentum mutual funds can increase expenses. Comparing expense ratios between momentum index funds and active funds helps in understanding cost implications.
- Diversification: Some funds may be concentrated in specific sectors showing strong momentum. Considering how these fit into an overall portfolio helps reduce sector-specific risk.
Who Can Consider Investments in Momentum Funds?
- Trend-Focused Investors: Some investors may prefer strategies that capture current market trends rather than long-term fundamentals. Momentum mutual funds align with this preference by focusing on stocks showing recent strength.
- Active Market Followers: Individuals who closely track market cycles may find momentum-based mutual funds appealing, as these schemes often respond quickly to changing market conditions.
- Short- to Medium-Term Planners: Investors with financial goals in the near future, such as 3–5 years, may consider momentum investing mutual funds as they target short- to medium-term opportunities.
- Risk-Tolerant Participants: Since momentum funds can be volatile, they may align with investors comfortable with fluctuations and willing to accept short-term risks in pursuit of higher potential returns.
- Diversification Seekers: Some investors may consider momentum funds to complement long-term holdings like value or growth funds, using them to add a tactical layer of diversification to their portfolio.
To Wrap Up…
Momentum funds offer a strategy that seeks to capture ongoing market trends by investing in stocks showing strong performance. They are available in different forms, each with unique approaches to implementing the momentum principle.
While these funds may deliver strong returns during trending markets, they also carry higher risks during volatile or sideways phases. Performance depends on market cycles, fund costs, and rebalancing frequency.
Frequently Asked Questions About Momentum Funds
Momentum funds are mutual funds that invest in stocks showing strong price trends. These strategies assume that well-performing stocks may maintain their trend over the short to medium term.
A momentum mutual fund selects stocks based on recent performance indicators such as price movements, relative strength, and trading volumes. Portfolios are rebalanced periodically to capture ongoing market momentum.
There are both active and passive options, such as Nifty200 Momentum 30 index funds and active momentum based mutual funds. “Best” varies with performance, costs, and market conditions. Past performance does not guarantee future results.
A momentum index fund passively tracks a benchmark like the Nifty200 Momentum 30 or Nifty Midcap150 Momentum 50 Index, investing in stocks that currently demonstrate strong momentum.
They capture market trends, use systematic approaches, and offer diversification. They may deliver strong returns in trending markets but come with higher volatility compared to traditional strategies.
During sideways or volatile markets, the performance of momentum strategies can vary and may not mirror strong trending phases. High turnover and concentration in trending sectors also increase risks, making returns less predictable than other equity mutual fund strategies.
A momentum preservation fund applies the momentum principle while focusing on minimising downside risks. It may use tactical allocation or balancing methods to reduce volatility.
A momentum-balanced fund combines equity momentum investing with other asset classes, such as debt. This reduces overall volatility while retaining exposure to stocks with strong upward momentum.
For equity-oriented schemes, short-term gains (redeemed within a year) are taxed at 20%. Long-term gains (over a year) are taxed at 12.5%, with up to ₹1.25 lakh exempt.
Momentum funds primarily focus on short- to medium-term opportunities. Their suitability for long-term investing depends on various factors, as performance can vary and may be less predictable over extended periods.
