Momentum + Quality= The Investor Advantage

[nishshkumarjaani@gmail.com]

Momentum Factor – Riding the Winners

Momentum is one of the most powerful drivers of stock performance. History shows that stocks which have been performing well tend to continue their winning streak in the near term.

This index captures momentum using both:

6-month performance (short-term momentum)
12-month performance (long-term momentum)

By applying risk-adjusted Z-scores and equally weighting both periods, the index ensures that only stocks with consistent strength– not just short-lived rallies – make it to the portfolio.

Quality Factor – Strength Behind the Growth

Momentum alone is not enough. A stock must also represent a fundamentally strong company with a durable business model. The quality screen ensures this by measuring:

Return on Equity (ROE) – higher efficiency in generating returns.

Debt-to-Equity (D/E) Ratio – preference for financially stable companies.

Earnings Growth Stability (EPS) – lower volatility in profits over the last 5 years.

This way, only businesses with sustainable competitive advantages and reliable financial health qualify.

By combining momentum with quality, the portfolio reflects:

Growth + Stability
Performance + Reliability
Opportunities + Risk Management

The Investor Advantage

For investors, this strategy means:

Exposure to high-potential mid and small-cap leaders.

A balance between short-term performance momentum and long-term fundamental strength.

A disciplined, rules-based approach that avoids emotional investing.

We start buying ETF of this potential opportunity -NSE ETF CODE=>MIDSMALL CMP 48.21

Nishesh Jani,CFTe

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