Momentum crashes because it buys junk. Bolt a quality filter on, and it becomes a strategy you could actually hold.

Rank companies by their twelve month strength, exactly like momentum, but only consider the ones earning a healthy gross profit on their assets. The result made about 16% a year against the market's 13.9%, turning ₹10 lakh into roughly ₹43 lakh. That is less than raw momentum's ₹73 lakh, and giving up that much return needs justifying. The justification is the ride.

The quality brake made the crashes noticeably gentler

This is the point of the whole exercise. Where unfiltered momentum plunged about 67% at its worst, insisting on real profitability cut that to roughly 50%. Still a serious fall, but a materially more survivable one. The junk that pure momentum loves, the story stocks that spike and vanish, is exactly what implodes in a downturn. Screening it out did not eliminate the risk, but it took the sharpest edge off the crashes, which for most investors is the difference between holding on and bailing out.

And it owned a completely different kind of company

Look at what the filter changed. Raw momentum's basket is a rotating cast of whatever is hot: micro caps, commodities, story stocks. This one leaned into steady, profitable growers, software and services names like Coforge, Zensar and Newgen, held for years rather than weeks. More than a quarter of the money sat in consumer facing businesses and technology, not the speculative fringe. Same momentum idea, an entirely more respectable portfolio.

A big number, still spread across uneven years

The tamer ride did not make the strategy tame. Started in the wrong month you could still lose a third of your money in a year. But watch it across longer holds and the profitability filter's steadying hand shows: the swings are narrower than raw momentum's, and the odds of beating the market climb the longer you stay.

Slower on paper, easier in life

Quality Momentum is the sensible cousin in the family. It will never post the eye watering numbers of raw momentum, and on a spreadsheet that looks like a loss. But investing is not done on a spreadsheet, and a strategy you can actually hold through a 50% fall beats a better one you abandon at 67%. The lesson is a general one: the best version of an idea is often not the highest returning version, but the highest returning version you will still be holding when it matters. That is a question only you can answer, and worth answering before you start.

So we took it to Krest, and ran it through the whole test.