Following a strong start to Fiscal Year 2025-2026 in April, the markets have continued to move higher, with the key benchmark indexes we track closing higher and generating a positive return.  At QuantMomo, our focus is now onboarding customers to the App and enabling access to 3 different strategies – Momentum, Value and All-weather. These 3 strategies when combined with a static allocation have produced an Alpha to investors since its inception. We will blog about this separately and update all our followers. 

For May 2025, the markets continued their upward trajectory and are now solidly in an uptrend having crossed the 200-day moving average and closing above it decisively. As we have begun a new month, we see that the markets can drive even higher given the mega size rate cut by RBI of 50bps (0.5%).

Notes on Momentum Strategy, Performance, and Outlook

Many of our followers ask us about Performance, the strategy and our outlook and following are a few points that we would like to make:

Performance 

• Momentum strategies are expected to outperform the market in the long term. For someone that is interested in a monthly alpha which can be generated consistently every month, we have not seen one that exists. The only consistent and guaranteed return is in Fixed Deposits or Post Office Monthly Income schemes.
• Momentum is one of many strategies that can be used to outperform the market. As avid investors, the founders of QuantMomo not only invest in Momentum strategies but also the Value an All weather strategies that we have created and published. A static allocation across all the 3 in right proportions has shown to produce outperformance 

Momentum Strategy

• Momentum is a factor that enables investors to participate in stocks which go up quickly. The idea is to ride the stock as it is going up. However, there are a lot of details about the timeframes, rebalance frequency, allocation, universe etc., 

• QuantMomo’s momentum algorithm is a short term momentum algorithm – We focus on a monthly rebalance

• QuantMomo has also investigated using shorter timeframes such as Weekly and longer timeframes such as Quarterly (3 months). While both of these can generate alpha in the longer term, we believe that weekly timeframes will be very difficult for investors to manage. We are exploring the option of including a quarterly momentum strategy in the future.

Outlook

We frequently get asked about our outlook and  once again there is a level of detail about the timeframe – While the future cannot be known with precision, what we can say is that the Stock market will generally have a positive drift over the long term. The fundamentals of the economy in India which is driven by investment, policy and participation by the people is strong and this bodes well for all the companies that are offering products and services in India and we expect the companies’ shares to increase in value in the long term. In the short term, markets do correct as well as can have some choppy action where they go nowhere. So, our guidance to our followers is to focus on the long term.