Active momentum funds are becoming more popular as major fund houses like Axis MF, Nippon MF, and Union AMC introduce new schemes in this category, which already includes more than 20 passive momentum funds.

Fund managers stress the importance of the ongoing review process in distinguishing active and passive strategies, as it allows for adaptation to market conditions. Umeshkumar Mehta, Chief Investment Officer at Samco Mutual Fund, pointed out that momentum strategies have performed well in India's mostly upward-trending market over the past 15 years, with some exceptions during events like COVID-19 and the global financial crisis. Samco Mutual Fund, which launched the first active momentum scheme in 2023, has outperformed its benchmark in the past year. Mehta emphasized the risks associated with momentum investing, particularly during market downturns, and highlighted the need for an active approach that enables quick responses to changing market dynamics.

Active momentum funds have gained popularity in the investment market due to the introduction of new schemes by major fund houses. These funds, which include both active and passive strategies, have seen success in India's upward-trending market over the past 15 years. However, it is important to note that momentum investing carries risks, especially during market downturns. Fund managers stress the need for an active approach that allows for quick responses to changing market dynamics. Samco Mutual Fund, for example, has outperformed its benchmark in the past year with its active momentum scheme.