Momentum Stocks Face Significant Drawdown Amid Market Shifts
Market darling to drawdown: Why momentum stocks are losing steam
The Economic Times
Image: The Economic Times
Momentum stocks, popular among investors for years, are experiencing a significant decline, marking their fourth-deepest drawdown in 21 years. This trend is attributed to macroeconomic volatility and a growing preference for value stocks and gold over the period from March 2024 to March 2026.
- 01Momentum stocks are currently experiencing their fourth-deepest drawdown in 21 years.
- 02The performance of momentum stocks is significantly lagging behind the Nifty 50 index.
- 03This decline is attributed to macroeconomic volatility affecting investor strategies.
- 04There is a noted shift in investor preference towards value stocks and gold.
- 05Some fund managers believe the current lag in momentum stocks is temporary.
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For years, momentum stocks have been a favored choice for many investors, but they are now facing a significant downturn, marking their fourth-deepest drawdown in 21 years. This decline is particularly notable as momentum stocks are trailing the Nifty 50 index from March 2024 to March 2026. The current market conditions are influenced by macroeconomic volatility and a shift in investor preference towards value stocks and gold. Despite this trend, some fund managers maintain that the underperformance of momentum stocks is a temporary setback, suggesting a potential rebound in the future as market conditions stabilize.
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