Top Momentum Funds in India (2026)
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 June, 2026. 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 Mutual Funds in India
UTI Nifty200 Momentum 30 Index Fund
This index fund tracks the Nifty200 Momentum 30 Index. It invests in 30 stocks from the Nifty 200 universe, selected based on momentum scores, and seeks to replicate the index’s performance, subject to tracking error.
Quant Momentum Fund
This is an actively managed equity fund that follows a momentum-based approach. It invests in stocks exhibiting price strength and relative momentum, with portfolio allocation determined by the fund manager’s framework and market conditions.
Axis Momentum Fund
This equity fund follows a momentum investing strategy. It invests in stocks that show favourable price trends and market strength, while portfolio changes depend on the scheme’s investment process and market movements.
ICICI Prudential Active Momentum Fund
This actively managed equity fund uses momentum as a stock-selection factor. It invests in companies showing sustained price strength, while sector and stock allocation may change based on the fund manager’s strategy.
Edelweiss Nifty Midcap150 Momentum 50 Index Fund
This index fund tracks the Nifty Midcap150 Momentum 50 Index. It invests in 50 mid-cap stocks selected through momentum-based criteria and seeks to replicate the benchmark, subject to tracking error.
Tata Nifty Midcap 150 Momentum 50 Index Fund
This index fund tracks the Nifty Midcap150 Momentum 50 Index. It provides exposure to mid-cap stocks selected based on momentum scores and aims to mirror the benchmark’s performance, subject to tracking differences.
Nippon India Nifty 500 Momentum 50 Index Fund
This index fund tracks the Nifty 500 Momentum 50 Index. It invests in 50 stocks from the Nifty 500 universe selected through a momentum-based methodology and follows the underlying index composition.
Motilal Oswal Nifty 200 Momentum 30 Index Fund
This index fund tracks the Nifty200 Momentum 30 Index. It invests in momentum-oriented stocks from the Nifty 200 universe and seeks to follow the benchmark performance, subject to tracking error.
Samco Active Momentum Fund
This actively managed equity fund follows a momentum investing approach. It invests in stocks showing relative price strength, while the portfolio may change based on market trends, stock behaviour and the fund manager’s model.
Motilal Oswal Nifty 500 Momentum 50 Index Fund
This index fund tracks the Nifty 500 Momentum 50 Index. It invests in stocks selected through a momentum-based index methodology and aims to replicate the benchmark’s performance, subject to tracking error.
Disclaimer: The AUM is updated as of 8th June, 2026. 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 with strong recent price momentum rather than focusing solely on fundamentals. The idea is that rising stocks may continue to gain while weaker ones may keep underperforming.
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.
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 do Momentum Funds work?
- Stock Selection Based on Price Trends: The momentum funds identify stocks that have shown strong price performance over a defined period. The idea is to capture stocks that are already moving upward based on recent market behaviour.
- Rule-Based Screening Process: These funds follow predefined quantitative rules such as price returns, relative strength, or momentum scores. This removes discretion and keeps stock selection systematic.
- Periodic Portfolio Rebalancing: Momentum changes over time. Funds rebalance at regular intervals to remove stocks that have lost momentum and add those showing stronger recent performance.
- Higher Weights to Stronger Performers: Stocks with higher momentum scores typically receive higher portfolio weights. This aligns the portfolio with prevailing market trends.
- Market-Driven Exposure: The portfolio composition adjusts automatically in response to market price movements, rather than company forecasts or fundamental expectations.
Features of Momentum Funds
- Rules-based stock selection: Momentum funds usually track indices that select stocks based on recent price strength. For example, the Nifty200 Momentum 30 Index selects 30 companies from the Nifty 200 using a Normalised Momentum Score.
- 6-month and 12-month return focus: Momentum scores are based on 6-month and 12-month price returns, adjusted for daily return volatility. This helps identify stocks showing stronger recent price trends.
- Periodic rebalancing: Momentum indices are generally reviewed and rebalanced semi-annually. This keeps the portfolio aligned with stocks that continue to show stronger momentum.
- Concentrated factor exposure: Momentum funds focus on a specific factor rather than broad market exposure. As of 29th May 2026, financial services had the highest weight in the Nifty200 Momentum 30 Index at 48.97%.
- Passive fund structure: Many momentum funds are index funds or ETFs that aim to track indices such as the Nifty200 Momentum 30 Index or the Nifty500 Momentum 50 Index, though they are subject to tracking error.
Advantages of Investing in Momentum Funds
- Exposure to strong price trends: Momentum funds invest in stocks with stronger recent price performance. This allows exposure to companies gaining market interest over a defined period.
- Defined selection method: Momentum funds follow a rules-based framework rather than discretionary stock selection. This can reduce fund manager bias and make portfolio construction more transparent.
- Market participation during uptrends: Momentum strategies can capture stocks that continue to lead during strong market phases. As of 29th May 2026, the Nifty500 Momentum 50 Index had delivered a 1-year total return of 16.70%.
- Diversified momentum basket: Momentum funds provide exposure to multiple stocks within a factor-based portfolio. For example, Nifty200 Momentum 30 holds 30 stocks, while Nifty500 Momentum 50 holds 50 stocks.
- Useful for factor-based allocation: Momentum funds can help investors study a specific factor in equity investing alongside other factors such as value, quality, low volatility, or alpha.
Risks of Investing in Momentum Funds
- High volatility: Momentum funds can be more volatile than broad-market funds because they invest in stocks that have already moved sharply. The Nifty200 Momentum 30 Index had an annualised standard deviation of 19.50% as of 29th May 2026.
- Trend reversal risk: Momentum strategies can underperform when market leadership changes suddenly. Stocks that performed well earlier may fall sharply if sentiment, earnings, or sector trends reverse.
- Sector concentration risk: Momentum funds may become concentrated in sectors showing strong recent performance. For example, financial services accounted for 48.97% of the Nifty200 Momentum 30 as of 29th May 2026.
- Frequent portfolio churn: Semi-annual rebalancing can lead to changes in holdings when stock momentum changes. This may affect costs, tracking error, and tax outcomes in some structures.
- Not suited for all market phases: Momentum strategies may lag during sideways, highly volatile, or reversal-led markets. Performance can differ sharply from diversified equity funds and broad market indices.
Factors to Consider Before Investing in Momentum Funds
- Index methodology: Momentum funds usually follow indices such as Nifty200 Momentum 30 or Nifty500 Momentum 50. Stock selection depends on price momentum, return periods, volatility adjustment, and index rules.
- Volatility levels: Momentum funds can exhibit sharper price movements than broad-market funds. Their performance depends on whether recent price leaders continue to perform.
- Sector concentration: Momentum portfolios may become concentrated in sectors showing strong recent performance. This can increase risk if that sector reverses.
- Market cycle suitability: Momentum strategies may work better in trending markets but can struggle during sideways, volatile, or reversal-led phases.
- Expense ratio and tracking error: Index funds and ETFs may not exactly track index returns due to differences in expenses, liquidity, and execution. Tracking error measures this gap.
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 who are comfortable with fluctuations and willing to accept short-term risks in pursuit of higher returns.
- Diversification Seekers: Some investors may consider momentum funds to complement long-term holdings such as value or growth funds, adding a tactical layer of diversification to their portfolios.
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.
Momentum funds select stocks based on recent performance indicators such as price movement, relative strength, and trading volume. Portfolios are rebalanced periodically to capture ongoing market momentum.
The best momentum mutual funds based on 3Y CAGR as of 8th June, 2026 includes:
– UTI Nifty200 Momentum 30 Index Fund
– Motilal Oswal Nifty 200 Momentum 30 Index Fund
– ICICI Pru Nifty 200 Momentum 30 Index Fund
– Bandhan Nifty200 Momentum 30 Index Fund
– Tata Nifty Midcap 150 Momentum 50 Index Fund
Disclaimer: This information is for educational purposes only and is not a recommendation. The fund can vary based on returns, expense ratio, tracking error, risk level, portfolio strategy, and investor suitability.
A momentum 30 index fund passively tracks a benchmark such as the Nifty200 Momentum 30 or Nifty Midcap150 Momentum 50 Index, investing in stocks that currently show strong momentum.
Momentum funds in India can capture market trends, use systematic approaches, and offer diversified factor exposure. They may deliver strong returns in trending markets but can be more volatile than traditional strategies.
During sideways or volatile markets, the performance of Nifty 500 momentum 50 and other momentum strategies can vary and may not mirror strong trending phases. High turnover and sector concentration can also increase risk.
Disclaimer: Momentum investing is subject to market risk and can experience periods of underperformance. Past performance of momentum strategies or indices does not guarantee future returns.
A momentum fund selects stocks based on recent price performance and market trends. A value fund selects stocks trading at lower valuations relative to fundamentals such as earnings or book value.
An active momentum fund may suit investors who understand factor-based strategies and are comfortable with portfolio churn and performance variability across market cycles. Outcomes depend on market trends, rebalancing frequency, and factor consistency.
Disclaimer: This content is for informational purposes only and is not investment advice. Please conduct independent research or consult a SEBI-registered Investment Advisor before making decisions.
For equity-oriented momentum funds, short-term gains on units redeemed within a year are taxed at 20%. Long-term gains on units held for more than a year are taxed at 12.5%, with gains up to ₹1.25 lakh exempt.
A midcap momentum index fund, or a broader momentum fund, primarily focuses on short- to medium-term price trends. Long-term suitability depends on risk profile, market cycles, portfolio allocation, and performance variability.
Disclaimer: This information does not constitute investment advice. Momentum funds can be volatile and may not suit every long-term investor. Suitability depends on risk appetite, investment horizon, portfolio allocation, and financial goals.
