Latest news with #ActiveMomentumFund
Economic Times
2 days ago
- Business
- Economic Times
Is momentum only about price? ICICI Prudential wants to redefine momentum investing
Traditional momentum investing has long chased rising stock prices, often falling prey to market euphoria and speculation. ICICI Prudential AMC is challenging this approach with its newly launched Active Momentum Fund, which prioritizes earnings momentum over pure price trends. ADVERTISEMENT Fund Manager Manasvi Shah argues that sustainable momentum stems from strengthening earnings trajectories rather than temporary price surges. This earnings-driven strategy aims to capture intrinsic value drivers while avoiding sentiment-based pitfalls. By leveraging strong research capabilities to distinguish between sustainable earnings momentum and fleeting market excitement, ICICI Prudential positions this fund as an "all-weather equity strategy" that can work across market cycles—potentially establishing a new paradigm in India's mutual fund landscape. Since the strategy focuses on capturing momentum in company or sector earnings, it is designed as an all-weather equity strategy. Historically, across market cycles, certain companies and sectors with stronger earnings trends tend to outperform the broader market. An earnings-revision-based approach, like ICICI Prudential Active Momentum, is inherently cycle-agnostic. Momentum investing, particularly with an earnings focus, is still relatively nascent in the Indian mutual fund space but has significant potential to evolve into a major category over the coming years. While momentum is often driven by sentiment or speculation, our fund avoids non-fundamental triggers. The core focus is on earnings momentum, because ultimately, earnings drive intrinsic value—and, consequently, stock prices. ADVERTISEMENT Because the strategy centers on earnings momentum, it avoids the influence of non-fundamental factors like temporary sentiment shifts or market noise. Generally, earnings trends are more sustainable than price movements. Our in-house research helps us differentiate between genuine earnings momentum and fleeting spikes, allowing for more informed stock follow a blend of bottom-up and top-down approaches. Momentum shifts across sectors and companies over time. Even in sectors where broader momentum is weak, some companies may be executing well and showing strong earnings trends. We aim for diversification across sectors and market capitalizations. While sectoral skews may occur, high concentration is unlikely. ADVERTISEMENT Any macro or micro trigger that could impact earnings trajectories is a critical consideration. Since this is an actively managed fund, without fixed rebalancing cycles, we maintain the flexibility to respond swiftly to such events when they influence momentum. The fund is capitalization-agnostic—we will invest wherever we find strong earnings momentum, whether in large, mid, or small caps, subject to maintaining portfolio liquidity. That's why our benchmark is the Nifty 500, rather than Nifty 50 or Nifty Midcap 150. ADVERTISEMENT This is a cycle-agnostic strategy that focuses on earnings revisions, which historically work across cycles. While pure momentum may falter during short-term volatility, earnings-based momentum tends to be stickier, making the approach more reliable. There's no fixed rebalancing schedule—we act as needed. While price-only momentum funds tend to churn more due to volatility, focusing on earnings provides greater stability and helps control turnover and costs. Price-based momentum is more vulnerable in corrections. But earnings-focused strategies often hold up better, as companies with strong earnings trends tend to decline less. If earnings momentum weakens across the board, the fund has the flexibility to raise cash within defined limits. This combination of stock selection and cash allocation is key to managing downside and generating long-term alpha. ADVERTISEMENT
Time of India
2 days ago
- Business
- Time of India
Is momentum only about price? ICICI Prudential wants to redefine momentum investing
Edited excerpts from a chat with the fund manager: Q: What makes this the right time to launch a momentum-based fund? Are current market conditions supportive, or is this a bold bet against the tide? Live Events Q: You focus on both price and earnings momentum. What's the secret sauce in your proprietary model? Do you tilt more toward one or is it a dynamic mix? Q: Can you walk us through how the model identifies "sustainable momentum" versus short-lived euphoria? Q: How do you guard against sector overexposure in a momentum-based strategy? Q: What role do macro triggers like rate cycles, elections, or global events play in your strategy? Q: What role do small and midcap stocks play, especially since momentum often builds faster in those segments? Q: Investors are always chasing alpha. Can this fund consistently beat benchmarks, or is momentum too cyclical? Q: How often do you churn the portfolio? Does momentum require higher turnover, and how do you manage the costs? Q: Momentum investing can struggle in market corrections. How does the fund manage drawdowns? (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Traditional momentum investing has long chased rising stock prices, often falling prey to market euphoria and speculation. ICICI Prudential AMC is challenging this approach with its newly launched Active Momentum Fund, which prioritizes earnings momentum over pure price Manager Manasvi Shah argues that sustainable momentum stems from strengthening earnings trajectories rather than temporary price surges. This earnings-driven strategy aims to capture intrinsic value drivers while avoiding sentiment-based leveraging strong research capabilities to distinguish between sustainable earnings momentum and fleeting market excitement, ICICI Prudential positions this fund as an " all-weather equity strategy " that can work across market cycles—potentially establishing a new paradigm in India's mutual fund the strategy focuses on capturing momentum in company or sector earnings, it is designed as an all-weather equity strategy. Historically, across market cycles, certain companies and sectors with stronger earnings trends tend to outperform the broader market. An earnings-revision-based approach, like ICICI Prudential Active Momentum, is inherently investing, particularly with an earnings focus, is still relatively nascent in the Indian mutual fund space but has significant potential to evolve into a major category over the coming momentum is often driven by sentiment or speculation, our fund avoids non-fundamental triggers. The core focus is on earnings momentum, because ultimately, earnings drive intrinsic value—and, consequently, stock the strategy centers on earnings momentum, it avoids the influence of non-fundamental factors like temporary sentiment shifts or market noise. Generally, earnings trends are more sustainable than price movements. Our in-house research helps us differentiate between genuine earnings momentum and fleeting spikes, allowing for more informed stock follow a blend of bottom-up and top-down approaches. Momentum shifts across sectors and companies over time. Even in sectors where broader momentum is weak, some companies may be executing well and showing strong earnings trends. We aim for diversification across sectors and market capitalizations. While sectoral skews may occur, high concentration is macro or micro trigger that could impact earnings trajectories is a critical consideration. Since this is an actively managed fund, without fixed rebalancing cycles, we maintain the flexibility to respond swiftly to such events when they influence fund is capitalization-agnostic—we will invest wherever we find strong earnings momentum, whether in large, mid, or small caps, subject to maintaining portfolio liquidity. That's why our benchmark is the Nifty 500, rather than Nifty 50 or Nifty Midcap is a cycle-agnostic strategy that focuses on earnings revisions, which historically work across cycles. While pure momentum may falter during short-term volatility, earnings-based momentum tends to be stickier, making the approach more no fixed rebalancing schedule—we act as needed. While price-only momentum funds tend to churn more due to volatility, focusing on earnings provides greater stability and helps control turnover and momentum is more vulnerable in corrections. But earnings-focused strategies often hold up better, as companies with strong earnings trends tend to decline less. If earnings momentum weakens across the board, the fund has the flexibility to raise cash within defined limits. This combination of stock selection and cash allocation is key to managing downside and generating long-term alpha.
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Business Standard
5 days ago
- Business
- Business Standard
Factor fund launches shift to active space with momentum, multi-factor
The factor fund launch spree by mutual funds (MFs) is moving from the passive to the active space. Two new fund offerings (NFOs) — ICICI Prudential Active Momentum Fund and Bandhan Multi-Factor Fund — are currently open for subscription. Sundaram MF's multi-factor fund NFO closed on Wednesday. In addition, Kotak MF is set to launch an active momentum fund later this month. Mirae Asset MF also has plans to launch a multi-factor fund through the fund-of-funds route. The launches in the active factor space coincide with the rising adoption of quantitative investing in the MF industry. Fund houses have been investing in setting up quantitative investing capabilities in recent years. Factor funds, which use investment models that focus on one or multiple factors — such as momentum, quality, value, size and market volatility — to construct portfolios, were until recently limited to the passive space, except for value- and size-based funds. Samco MF launched the first actively managed momentum fund in 2023. Since then, several fund houses have ventured into the active factor space with momentum, multi-factor and quality funds. These include active quality funds from WhiteOak Capital and ICICI Prudential, and active momentum funds from Union, Nippon India and Motilal Oswal. In addition, there are at least three schemes that take a multi-factor approach, including SBI MF's quant fund. The launches are happening even as the passive space has multiple factor fund offerings. Several such index funds and exchange-traded funds (ETFs), which mostly track the Nifty 200 Momentum 30, Nifty 200 Quality 30, Nifty 50 Value 20 and Nifty 100 Low Volatility 30 indices, have been operating for over three years. Experts say that while passive funds are available, there is merit in having active options. 'Market conditions and factor performance cycles are not static — they evolve with macroeconomic shifts, sentiment and valuation regimes. An active approach enables us to dynamically allocate between factors, manage risks more nimbly, and potentially capture alpha by avoiding mechanical exposure to underperforming segments,' said Chintan Haria, principal – investment strategy, ICICI Prudential Mutual Fund. 'While active factor funds also rely on factor models to shortlist stocks, they may also use other subjective elements such as corporate governance filters or futuristic expectations in decision-making. Their factor models may also be more dynamic in nature and reviewed by the fund managers periodically,' he said. For instance, while passive momentum funds only rely on price momentum, the recently launched ICICI Prudential MF's active momentum fund uses both earnings and price momentum. The use of factors and quantitative strategies is seeing adoption in regular equity schemes. Edelweiss MF manages the equity portion of four of its active funds through this strategy. NJ Mutual Fund has been managing all its equity and hybrid funds through factor-based strategies since inception. Shriram MF adopted the quantitative approach in September 2023.
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Business Standard
08-07-2025
- Business
- Business Standard
Looking for market momentum? ICICI Prudential's new fund may be the answer
In a bid to offer investors a more strategic way to ride market trends, ICICI Prudential Mutual Fund on Wednesday launched the ICICI Prudential Active Momentum Fund—an open-ended equity scheme designed to capture opportunities arising from persistent trends in stock prices and earnings. At the heart of the fund is a unique approach that blends price momentum with earnings momentum, setting it apart from traditional momentum strategies that rely solely on technical price patterns. 'We aim to approach momentum in a fundamental manner by focusing on earnings and estimates momentum, complemented by price momentum,' said Sankaran Naren, Executive Director & Chief Investment Officer, ICICI Prudential AMC. 'India's equity market is diverse, and this strategy allows the fund to flexibly move across sectors and market caps to harness emerging trends.' What Is Momentum Investing? Momentum investing is a strategy that targets stocks already on an upward trend, betting that their momentum will continue in the near term. ICICI Prudential's approach incorporates two distinct forms: Price Momentum: Focuses on stocks that are already rising in price based on technical factors and market sentiment. While effective in the short term, it can be susceptible to sudden trend reversals. Earnings Momentum: Selects stocks with rising earnings estimates or improving analyst ratings—suggesting that the upward trend is supported by improving fundamentals. This is considered more sustainable over time. How the Fund Identifies Momentum The fund uses a hybrid strategy—combining top-down macroeconomic views (sector, policy, interest rate trends) and bottom-up stock analysis (earnings revisions, margins, operational metrics) to identify opportunities. Example: The IT sector historically showed strong stock performance that tracked earnings growth. Similarly, NBFCs showed price volatility based on interest rate cycles—highlighting how macro and micro trends influence momentum. Why Consider This Fund? ICICI Prudential Active Momentum Fund offers flexibility on multiple levels: Moves across sectors – Captures trends wherever they emerge, from tech to industrials. Adaptable investment style – Automatically pivots between growth, value, or quality depending on what's leading the market. Cross-market cap flexibility – Momentum can occur in large-cap, mid-cap, or small-cap stocks, and this fund is built to chase those trends. Dual analysis model – Combines top-down macro insights and bottom-up stock selection for diversified exposure. Key Details : · Name of Scheme: ICICI Prudential Active Momentum Fund · Type: An open ended equity scheme following momentum theme · Benchmark Index: Nifty 500 TRI · Minimum Application Amount: ₹5,000 (plus in multiples of Re. 1) · Minimum Additional Investment: ₹1,000 (plus in multiples of Re. 1) · Exit Load: 1% of applicable NAV for redemptions within 12 months; Nil thereafter · Fund Managers: Ms. Manasvi Shah and Ms. Sharmila D'silva (overseas investments) The Active Momentum Fund's focus on sustainable trends driven by real earnings growth, coupled with the ability to move dynamically across styles and sectors, aims to give investors the edge they need to stay ahead of the curve. As always, potential investors should assess their risk appetite and investment horizon before making any decisions.
Time of India
08-07-2025
- Business
- Time of India
NFO Alert: ICICI Prudential Mutual Fund launches active momentum fund
ICICI Prudential Mutual Fund has announced the launch of the ICICI Prudential Active Momentum Fund , an open ended equity scheme following momentum theme. It is an offering designed to capture opportunities arising from persistent price and earnings/estimates trends in the market. The new fund offer or NFO of the fund is open for subscription and will close on July 22. Also Read | NFO Insight: Quant Mutual Fund's equity saving fund opens for subscription. Should you add this in current market scenario? Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Bank Owned Properties For Sale In Trung Liet (Prices May Surprise You) Foreclosed Homes | Search ads Search Now Undo The fund will be benchmarked against Nifty 500 TRI and will be managed by Manasvi Shah and Sharmila D'silva. 'We aim to approach momentum in a fundamental manner by focusing on earnings/estimates momentum, complemented by price momentum. India's equity market is diverse with stocks and sectors displaying varied earnings trends at different points in time, and our Scheme aims to capitalise on these trends,' said Sankaran Naren, ED and CIO, ICICI Prudential AMC. Live Events "The Scheme has the flexibility to move across sectors; market caps and uses a combination of top down and bottom-up approach in portfolio construction,' Naren added. The scheme's unique approach combines earnings/estimates and price momentum, allowing it to adapt seamlessly to changing market conditions, and benefiting from sustained trends, according to a release by the fund house. The minimum application amount is Rs 5,000 (plus in multiples of Re 1) and for additional investment, the minimum application amount is Rs 1,000 (plus in multiples of Re 1) An exit load of 1% of applicable NAV for redemptions within 12 months and the exit load will be nil thereafter. Also Read | Best mid cap mutual funds to invest in July 2025 According to the fund house, one should invest in this fund because it provides flexibility to move across sectors thereby widening the universe, moves across styles basis the market trends, provides flexibility to move across market caps depending upon the flows, and lastly has flexible investment approach which means it is mix of top down & bottom up approach. The fund is suitable for investors seeking long-term wealth creation and who want an open-ended equity fund investing in equity and equity related instruments of companies reflecting momentum factors. What is momentum investing ? It is a strategy that aims to capitalize on the continuance of existing trends (price trends or earning trends) in the market.
