{"id":477,"date":"2026-04-13T16:15:59","date_gmt":"2026-04-13T10:45:59","guid":{"rendered":"https:\/\/prodigypro.co.in\/blog\/?p=477"},"modified":"2026-04-13T17:11:08","modified_gmt":"2026-04-13T11:41:08","slug":"what-are-momentum-funds","status":"publish","type":"post","link":"https:\/\/prodigypro.co.in\/blog\/what-are-momentum-funds\/","title":{"rendered":"What Are Momentum Funds? A Complete Guide"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/prodigypro.co.in\/blog\/wp-content\/uploads\/2026\/04\/Momentum-Funds-1024x576.webp\" alt=\"Momentum Funds\" class=\"wp-image-478\" srcset=\"https:\/\/prodigypro.co.in\/blog\/wp-content\/uploads\/2026\/04\/Momentum-Funds-1024x576.webp 1024w, https:\/\/prodigypro.co.in\/blog\/wp-content\/uploads\/2026\/04\/Momentum-Funds-300x169.webp 300w, https:\/\/prodigypro.co.in\/blog\/wp-content\/uploads\/2026\/04\/Momentum-Funds-768x432.webp 768w, https:\/\/prodigypro.co.in\/blog\/wp-content\/uploads\/2026\/04\/Momentum-Funds-1536x864.webp 1536w, https:\/\/prodigypro.co.in\/blog\/wp-content\/uploads\/2026\/04\/Momentum-Funds-2048x1152.webp 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/prodigypro.co.in\/blog\/what-are-momentum-funds\/#Momentum_Funds\" >Momentum Funds<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/prodigypro.co.in\/blog\/what-are-momentum-funds\/#Understanding_Momentum_Funds\" >Understanding Momentum Funds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/prodigypro.co.in\/blog\/what-are-momentum-funds\/#How_Momentum_Funds_Work\" >How Momentum Funds Work<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/prodigypro.co.in\/blog\/what-are-momentum-funds\/#Investing_in_Momentum_Funds_Pros_Cons_and_Considerations\" >Investing in Momentum Funds: Pros, Cons, and Considerations<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/prodigypro.co.in\/blog\/what-are-momentum-funds\/#Tax_Implications_of_Momentum_Funds\" >Tax Implications of Momentum Funds<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/prodigypro.co.in\/blog\/what-are-momentum-funds\/#Maximising_Returns_The_Allure_of_Momentum_Investing\" >Maximising Returns: The Allure of Momentum Investing<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/prodigypro.co.in\/blog\/what-are-momentum-funds\/#On_a_parting_note%E2%80%A6\" >On a parting note\u2026<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/prodigypro.co.in\/blog\/what-are-momentum-funds\/#What_are_momentum_funds\" >What are momentum funds?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/prodigypro.co.in\/blog\/what-are-momentum-funds\/#How_are_momentum_funds_different_from_regular%E2%80%82investing\" >How are momentum funds different from regular\u2002investing?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/prodigypro.co.in\/blog\/what-are-momentum-funds\/#How_long_has_the%E2%80%82implementation_of_momentum_funds_been\" >How long has the\u2002implementation of momentum funds been?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/prodigypro.co.in\/blog\/what-are-momentum-funds\/#What_are_the_biggest_risks_of%E2%80%82momentum_investing\" >What are the biggest risks of\u2002momentum investing?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/prodigypro.co.in\/blog\/what-are-momentum-funds\/#What_things_must_investors_keep_in_mind_before%E2%80%82investing_in_momentum_funds\" >What things must investors keep in mind before\u2002investing in momentum funds?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Momentum_Funds\"><\/span>Momentum Funds<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Suppose you are looking to leverage market trends and capitalize on short-term price movements. In that case, momentum funds have become a popular investment strategy in today\u2019s fast-paced world of investing. Based on the idea that stocks\u2002or assets with strong recent performance are likely to persist on this trajectory, providing the ability for investors to ride the wave of success.&nbsp;<\/p>\n\n\n\n<p>By contrast, Momentum investing identifies stocks already in motion \u2014 often selling at high prices, relying on their continued gains \u2014 instead of those that are low in price and being held\u2002for years. This article will discuss what momentum funds are,\u2002what distinguishes them, the methods they use, and the advantages and disadvantages of adding them to your investment portfolio. The world of investing is a dynamic landscape, whether you&#8217;re a professional investor\u2002or a newcomer, and developing a proper understanding of the momentum fund will open your eyes to untapped market opportunities.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Understanding_Momentum_Funds\"><\/span>Understanding Momentum Funds<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Momentum funds are those funds in which the\u2002fund manager invests in stocks or assets that are demonstrating upward price trends and believes that they will continue to grow and that they will give a higher return. The premise is the &#8220;momentum\u2002effect,&#8221; which is the idea that whatever has been good will continue to be good for some time, and whatever has been bad will continue to be bad.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_Momentum_Funds_Work\"><\/span>How Momentum Funds Work<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>These types\u2002of funds are investment funds that attempt to capitalize on the upward and downward trends of the market, such as investing based on the price momentum of a stock. The concept is straightforward: if a stock, or asset, has\u2002recently been going up in price, the fund buys it, betting that its price will continue to rise. By contrast, if something is falling in price, the fund may sell it\u2002to avoid losses.<\/p>\n\n\n\n<p>These funds depend on the assumption that stocks that have done well recently will continue to do so shortly, and\u2002those that have done poorly will continue to underperform. Analysing past performance and market trends, often through charts and data for trends and patterns, momentum\u2002funds make choices.<\/p>\n\n\n\n<p>Because the strategy can include frequent trading of purchases and sales, the investments in momentum funds are often viewed as short to midterm in nature as opposed to midterm\u2002to long-term investments. Yet, be mindful that while it is profitable, working with this method can\u2002also be dangerous. Investors could also face rapid losses if the market abruptly\u2002shifts direction.<\/p>\n\n\n\n<p>Here are some important things to understand about\u2002momentum funds:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Buying High:<\/strong> Where conventional investing methods might stress buying low and selling high, momentum investing tends to involve buying high, assuming price growth will\u2002continue.<\/li>\n\n\n\n<li><strong>Short-Term Focus: <\/strong>Momentum funds typically\u2002seek to achieve returns in the short to medium term. They typically hold onto assets for weeks\u2002or months, not years. Momentum traders generally want to buy fast and sell fast, to take\u2002advantage of short-term price movements.<\/li>\n\n\n\n<li><strong>Research Focus: <\/strong>These funds look at observable market trends and price\u2002movements, along with the fundamentals, to target stocks with strong upward momentum.<\/li>\n\n\n\n<li><strong>Risk Factor:<\/strong> Momentum investing has\u2002risks associated with it. The swift price shifts can lead to huge losses,\u2002particularly if the market reverses or trends change.<\/li>\n\n\n\n<li><strong>Current Market Conditions: <\/strong>These funds frequently capture the market&#8217;s upside, however, they can\u2002underperform in down markets when trends reverse.<\/li>\n\n\n\n<li><strong>Diversification:<\/strong> Similar to other funds, momentum funds may seek to invest in diverse sectors or\u2002markets to lower risk.<\/li>\n\n\n\n<li><strong>Minimizing Losses:<\/strong> If a\u2002stock begins to fall, momentum investors tend to dump it quickly to cut losses.<\/li>\n<\/ul>\n\n\n\n<p>To sum up, momentum funds thrive on upward price movement and creation of new highs but also risk reversal or trend disruption and are suited more to those who can read\u2002market directions and act on them quickly.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Investing_in_Momentum_Funds_Pros_Cons_and_Considerations\"><\/span>Investing in Momentum Funds: Pros, Cons, and Considerations<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>They are planning to drive an uptrend, and that is where\u2002it gets fuzzy. Here\u2019s a straightforward overview\u2002of the pros, cons and considerations of investing in these funds:<\/p>\n\n\n\n<p><strong>Pros:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Ability to Get High Return:<\/strong> If you choose the rising\u2002stocks correctly, you can make a lot from your investments.<\/li>\n\n\n\n<li><strong>Simplicity:<\/strong> The strategy is simple \u2014 put money into what is\u2002already working.<\/li>\n\n\n\n<li><strong>Market Signals:<\/strong> These funds are often in tune with current market signals and\u2002generate consistent results.<\/li>\n<\/ul>\n\n\n\n<p><strong>Cons:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>The market can get volatile:<\/strong> Momentum stocks can be volatile and subject to wild price\u2002swings.<\/li>\n\n\n\n<li><strong>Chasing Performance: <\/strong>The allure of buying high, selling\u2002low.  <\/li>\n\n\n\n<li><strong>Short-Term Approach:<\/strong> Most of these funds\u2002don\u2019t hold their investments for long periods, which can result in the loss of long-term market gains.<\/li>\n<\/ul>\n\n\n\n<p><strong>Considerations:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Research is Key:<\/strong> Learn about the fund\u2019s past\u2002performance and management strategy.<\/li>\n\n\n\n<li><strong>Know\u2002Your Risk Tolerance:<\/strong> Ensure you\u2019re comfortable with the risks inherent in the trading.<\/li>\n\n\n\n<li><strong>Diversification:<\/strong> Avoid allocating all your funds in a single category of fund; think about allocating your funds across several sectors.<\/li>\n\n\n\n<li>Examining these factors will help you get closer\u2002to making a little more informed decision about whether to invest in momentum funds or not.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Tax_Implications_of_Momentum_Funds\"><\/span>Tax Implications of Momentum Funds<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>If you are investing in momentum funds, note the following tax implications:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Short-Term Capital Gains (STCG):<\/strong> If the funds are held for less than one year, any profit will be taxed as STCG at 20%.<\/li>\n\n\n\n<li><strong>Long-Term Capital Gains (LTCG):<\/strong> If the funds are held for one year or more, the gains will be considered LTCG. The applicable tax on LTCG in this case would be 12.5% if the gains exceed \u20b91.25 lakh per year.<\/li>\n\n\n\n<li><strong>Frequent Trading:<\/strong> A lot of purchases and sales at once lead to multiple tax events in a year, raising the tax bills.<\/li>\n\n\n\n<li><strong>Dividends:<\/strong> Dividends derived from these funds are subject to Dividend Distribution Tax (DDT) and are deducted before being distributed to investors. Dividends exceeding \u20b95,000 are subject to 10% Tax Deducted at Source (TDS).<\/li>\n<\/ul>\n\n\n\n<p>In conclusion, momentum funds can be a good strategy, but they also come with tax implications. You would be wise to seek out a tax professional to advise you on your options.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Maximising_Returns_The_Allure_of_Momentum_Investing\"><\/span>Maximising Returns: The Allure of Momentum Investing<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>This method of momentum investing is dependent on the market action, where increasing\u2002prices can draw additional buyers, resulting in even higher prices. It\u2019s like riding a wave \u2014 if you can surf at the right time, you might be able to get a really good ride until it crashes down\u2002again.<\/p>\n\n\n\n<p>Momentum investing can be attractive because it can bring quick profits\u2002if you pick things correctly. But the caveat is that\u2002trends can shift at a moment\u2019s notice, and what rises can also fall. So,\u2002there is a risk of making losses just as there is potential to make high returns.<\/p>\n\n\n\n<p><strong>Also, read  &#8211; <a href=\"https:\/\/prodigypro.co.in\/blog\/aifs-in-portfolio-diversification\/\">The role of AIFs in portfolio diversification<\/a><\/strong><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"On_a_parting_note%E2%80%A6\"><\/span>On a parting note\u2026<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>The strategy of momentum funds, which are based on a belief in capitalizing on the rise of stocks and other assets that have performed well lately\u2002, provides an interesting investing tactic. Investing in the trending cryptocurrencies can\u2002yield high returns if the same strategy of buying high\/riding the wave of success is adopted, but such investments are undoubtedly risky, as cryptocurrencies may be volatile, and the trend can shift abruptly, leading to quick losses.<\/p>\n\n\n\n<p>That said, for investors wanting to\u2002add these funds to their marketplace, it is important to know the nuances of momentum investing. It takes diligent research, a careful ear to the ground for market signals, and\u2002the willingness to act quickly based on evolving circumstances. Additionally, a varied approach can reduce risks and improve total\u2002returns.<\/p>\n\n\n\n<p>As such, assessing your risk tolerance and integrating the critical elements of momentum\u2002investing become essential steps for you in navigating the market, regardless of your experience level.<\/p>\n\n\n\n<p>Please share your thoughts on this post by leaving a reply in the comments section. Contact us via phone,<a href=\"http:\/\/wa.me\/917347700888\" target=\"_blank\" rel=\"noreferrer noopener\">\u00a0WhatsApp<\/a>, or email to learn more about mutual funds, or visit our<a href=\"https:\/\/bfccapital.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">\u00a0website<\/a>. Alternatively, you can download the<a href=\"https:\/\/play.google.com\/store\/apps\/details?id=com.bfc_mf.prodigy_app&amp;pcampaignid=web_share\" target=\"_blank\" rel=\"noreferrer noopener\">\u00a0Prodigy Pro<\/a>\u00a0app to start investing today!<\/p>\n\n\n<div ><style>#sp-ea-476 .spcollapsing { height: 0; overflow: hidden; transition-property: height;transition-duration: 300ms;}#sp-ea-476.sp-easy-accordion>.sp-ea-single {margin-bottom: 10px; border: 1px solid #e2e2e2; }#sp-ea-476.sp-easy-accordion>.sp-ea-single>.ea-header a {color: #ffffff;}#sp-ea-476.sp-easy-accordion>.sp-ea-single>.sp-collapse>.ea-body {background: #fff; color: #444;}#sp-ea-476.sp-easy-accordion>.sp-ea-single {background: #7c8cff;}#sp-ea-476.sp-easy-accordion>.sp-ea-single>.ea-header a .ea-expand-icon { float: left; color: #444;font-size: 16px;}<\/style><div id=\"sp_easy_accordion-1776071506\"><div id=\"sp-ea-476\" class=\"sp-ea-one sp-easy-accordion\" data-ea-active=\"ea-click\" data-ea-mode=\"vertical\" data-preloader=\"\" data-scroll-active-item=\"\" data-offset-to-scroll=\"0\"><div class=\"ea-card ea-expand sp-ea-single\"><h3 class=\"ea-header\"><span class=\"ez-toc-section\" id=\"What_are_momentum_funds\"><\/span><a class=\"collapsed\" id=\"ea-header-4760\" role=\"button\" data-sptoggle=\"spcollapse\" data-sptarget=\"#collapse4760\" aria-controls=\"collapse4760\" href=\"#\" aria-expanded=\"true\" tabindex=\"0\"><i aria-hidden=\"true\" role=\"presentation\" class=\"ea-expand-icon eap-icon-ea-expand-minus\"><\/i> What are momentum funds?<\/a><span class=\"ez-toc-section-end\"><\/span><\/h3><div class=\"sp-collapse spcollapse collapsed show\" id=\"collapse4760\" data-parent=\"#sp-ea-476\" role=\"region\" aria-labelledby=\"ea-header-4760\"> <div class=\"ea-body\"><p><span style=\"font-weight: 400\">Momentum funds buy\u2002assets with price patterns they think will persist based on recent performance.<\/span><\/p><\/div><\/div><\/div><div class=\"ea-card sp-ea-single\"><h3 class=\"ea-header\"><span class=\"ez-toc-section\" id=\"How_are_momentum_funds_different_from_regular%E2%80%82investing\"><\/span><a class=\"collapsed\" id=\"ea-header-4761\" role=\"button\" data-sptoggle=\"spcollapse\" data-sptarget=\"#collapse4761\" aria-controls=\"collapse4761\" href=\"#\" aria-expanded=\"false\" tabindex=\"0\"><i aria-hidden=\"true\" role=\"presentation\" class=\"ea-expand-icon eap-icon-ea-expand-plus\"><\/i> How are momentum funds different from regular\u2002investing?<\/a><span class=\"ez-toc-section-end\"><\/span><\/h3><div class=\"sp-collapse spcollapse \" id=\"collapse4761\" data-parent=\"#sp-ea-476\" role=\"region\" aria-labelledby=\"ea-header-4761\"> <div class=\"ea-body\"><p><span style=\"font-weight: 400\">Unlike traditional investing, which stresses buying low and selling high, momentum funds seek to buy high to benefit from further price appreciation.<\/span><\/p><\/div><\/div><\/div><div class=\"ea-card sp-ea-single\"><h3 class=\"ea-header\"><span class=\"ez-toc-section\" id=\"How_long_has_the%E2%80%82implementation_of_momentum_funds_been\"><\/span><a class=\"collapsed\" id=\"ea-header-4762\" role=\"button\" data-sptoggle=\"spcollapse\" data-sptarget=\"#collapse4762\" aria-controls=\"collapse4762\" href=\"#\" aria-expanded=\"false\" tabindex=\"0\"><i aria-hidden=\"true\" role=\"presentation\" class=\"ea-expand-icon eap-icon-ea-expand-plus\"><\/i> How long has the\u2002implementation of momentum funds been?<\/a><span class=\"ez-toc-section-end\"><\/span><\/h3><div class=\"sp-collapse spcollapse \" id=\"collapse4762\" data-parent=\"#sp-ea-476\" role=\"region\" aria-labelledby=\"ea-header-4762\"> <div class=\"ea-body\"><p><span style=\"font-weight: 400\">Momentum funds typically seek short- to medium-term returns, holding assets\u2002for weeks or months, not years.<\/span><\/p><\/div><\/div><\/div><div class=\"ea-card sp-ea-single\"><h3 class=\"ea-header\"><span class=\"ez-toc-section\" id=\"What_are_the_biggest_risks_of%E2%80%82momentum_investing\"><\/span><a class=\"collapsed\" id=\"ea-header-4763\" role=\"button\" data-sptoggle=\"spcollapse\" data-sptarget=\"#collapse4763\" aria-controls=\"collapse4763\" href=\"#\" aria-expanded=\"false\" tabindex=\"0\"><i aria-hidden=\"true\" role=\"presentation\" class=\"ea-expand-icon eap-icon-ea-expand-plus\"><\/i> What are the biggest risks of\u2002momentum investing?<\/a><span class=\"ez-toc-section-end\"><\/span><\/h3><div class=\"sp-collapse spcollapse \" id=\"collapse4763\" data-parent=\"#sp-ea-476\" role=\"region\" aria-labelledby=\"ea-header-4763\"> <div class=\"ea-body\"><p><span style=\"font-weight: 400\">However, momentum investing can also lead to substantial losses\u2002in the case of sudden reversals in the market, causing prices to gyrate.<\/span><\/p><\/div><\/div><\/div><div class=\"ea-card sp-ea-single\"><h3 class=\"ea-header\"><span class=\"ez-toc-section\" id=\"What_things_must_investors_keep_in_mind_before%E2%80%82investing_in_momentum_funds\"><\/span><a class=\"collapsed\" id=\"ea-header-4764\" role=\"button\" data-sptoggle=\"spcollapse\" data-sptarget=\"#collapse4764\" aria-controls=\"collapse4764\" href=\"#\" aria-expanded=\"false\" tabindex=\"0\"><i aria-hidden=\"true\" role=\"presentation\" class=\"ea-expand-icon eap-icon-ea-expand-plus\"><\/i> What things must investors keep in mind before\u2002investing in momentum funds?<\/a><span class=\"ez-toc-section-end\"><\/span><\/h3><div class=\"sp-collapse spcollapse \" id=\"collapse4764\" data-parent=\"#sp-ea-476\" role=\"region\" aria-labelledby=\"ea-header-4764\"> <div class=\"ea-body\"><p><span style=\"font-weight: 400\">They should analyse fund performance, work\u2002out their risk tolerance and check for the right diversifications across sectors.<\/span><\/p><\/div><\/div><\/div><\/div><\/div><\/div>\n\n\n<p><strong>Disclaimer: <\/strong>This article is for educational purposes only and does not intend to substitute expert guidance. Mutual fund investments are subject to market risks. Please read the scheme-related document carefully before investing.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Momentum Funds Suppose you are looking to leverage market trends and capitalize on short-term price movements. 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