Value mutual funds are a type of equity mutual fund where the fund managers adopt a value investing strategy. They invest in stocks that trade at a discount, i.e., their intrinsic value is higher than the market price. These shares are usually undervalued due to temporary reasons. Therefore, they have the potential to generate substantial returns in the long run. By choosing the best value mutual funds, investors can maximise their portfolio value.
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| Fund Name | Category | Risk | 1Y Returns | Rating | Fund Size(in Cr) |
|---|---|---|---|---|---|
| ICICI Prudential Value Discovery Fund | Equity | Very High | 11.9% | 4 | ₹27,515 |
| UTI Value Opportunities Fund | Equity | Very High | 3.4% | 4 | ₹7,018 |
| IDFC Sterling Value Fund | Equity | Very High | 3.8% | 3 | ₹5,178 |
| Templeton India Value Fund | Equity | Very High | 9.8% | 3 | ₹826 |
| Nippon India Value Fund | Equity | Very High | 2.5% | 3 | ₹4,849 |
| HSBC Value Fund | Equity | Very High | 5.0% | 3 | ₹8,076 |
| IDBI Long Term Value Fund | Equity | Very High | 5.2% | 2 | ₹99 |
| HDFC Capital Builder Value Fund | Equity | Very High | 2.9% | 2 | ₹5,497 |
| JM Value Fund | Equity | Very High | 5.5% | 2 | ₹167 |
| Tata Equity PE Fund | Equity | Very High | 5.8% | 2 | ₹5,323 |
| Quantum Long Term Equity Value Fund | Equity | Very High | 7.0% | 2 | ₹879 |
| Indiabulls Value Fund | Equity | Very High | 0.8% | 2 | ₹10 |
| Aditya Birla Sun Life Pure Value Direct Fund | Equity | Very High | 0.2% | 1 | ₹4,037 |
| DSP Value Fund | Equity | Very High | 3.7% | -- | ₹578 |
| Quant Value Fund | Equity | Very High | 9.4% | -- | ₹615 |
| View All |
Here are some features of value mutual funds:
Asset allocation: According to the Securities and Exchange Board of India (SEBI) guidelines, value mutual funds must allocate at least 65% of their investment corpus to stocks.
Risk-reward ratio: Since the underlying securities of value mutual funds primarily include equity, their performance is impacted by volatile market conditions. Accordingly, investors should be prepared to face significant losses.
However, because the underlying stocks are undervalued, they can maximise portfolio returns in the long term. There’s also a reduced risk of capital loss with value funds in a volatile market because of this reason.
Value funds fall under the equity mutual funds category and attract taxes accordingly.
Short-term capital gains: Gains made from the sale of units having a holding period of less than 1 year are taxed at 15%.
Long-term capital gains: If an investor redeems held units after 1 year, yields up to Rs.1 lakh is exempt from taxation. However, a long-term capital gains tax of 10% is applicable on the amount exceeding Rs.1 lakh.
Finding the best value stocks requires seasoned skills, analysis, and market awareness. This process can be overwhelming. Individuals can consider the best value mutual funds 2022 as an alternative. After performing extensive market research and analysis, professional fund managers handle these scheme portfolios, mitigating the risk for an investor. These funds are a suitable option for a long-term investment horizon, preferably more than 5 years.
That said, it’s vital for investors to consider certain aspects before finding out which is the best value mutual fund for them.
Here are some things that investors must consider before investing in the best value mutual funds in 2022:
Investment goal: Investment goals vary among investors. Not every value fund scheme can match every individual’s financial objectives. While some schemes might deliver greater returns at a 3 year-point, others might require 7 years to generate maximum yields. It’s essential, thus, to evaluate your requirements and find a value fund scheme aligning with that.
Risk appetite: The risk level associated with the various schemes available to investors is not the same. One fund might be riskier than the other, depending upon the performance of the underlying stocks. Hence, it’s important for one to assess his/her risk profile before investing in top value mutual funds.
Expense ratio: This refers to the charges imposed by an asset management company (AMC) on investors to cover its operating and administrative expenses. Individuals must make sure to compare the expense ratio of different schemes and consider other factors before parting with their savings.
Experience of the fund manager: When it comes to the best value mutual funds, respective fund managers need to have a thorough knowledge and market awareness. Also, they need to possess the skills to make the right decisions at the right time. Hence, the track record of a fund manager is a crucial aspect to consider when investing in value funds.
Past performance of a fund: The performance of a fund since its inception reflects whether it has been able to achieve its objective. Hence, one must consider the historical returns of a fund when investing in this type of scheme. However, note that a fund’s past performance may not hold in the future.
Direct or regular plan: When it comes to value mutual funds, there are two plans - direct and regular. The first one is offered by an AMC directly; it does not involve third parties like brokers or distributors. Conversely, investors have to subscribe to a regular plan via distributors or brokers, which involve commission and brokerage. Hence, regular plans have a higher expense ratio and report a lower NAV than direct plans.
Here are some benefits of investing in the best value mutual funds:
Portfolio diversification: Value funds invest in undervalued stocks across different sectors. It helps in diversifying a portfolio with limited exposure to options with a significant risk-reward ratio.
Lower downside risk: The downside risk and the level of volatility in the case of value mutual funds is lower when compared with other types of equity funds. Since these stocks are already undervalued, they are less impacted in a bearish market.
High-growth potential: Value funds have the potential to multiply investors’ wealth significantly and maximise portfolio value over the long term.
Investment route: Investors can allocate their savings to mutual funds via two modes, namely lump sum and systematic investment plan (SIP). The first route allows individuals to invest the entire amount in one go. By opting for the SIP mode, they can invest in a value fund via fixed instalments at regular intervals (monthly, quarterly, yearly, etc.). While individuals need to invest at least Rs.1,000 if they opt for the lump sum route, they can start a SIP with Rs.100. Note that this minimum amount may vary from one scheme to another.
Now let us jump and check about these top 15 mutual fund schemes.
Fund Performance: The ICICI Prudential Value Discovery Fund has given 24.46% annualized returns in the past three years and 13.59% in the last 5 years. The ICICI Prudential Value Discovery Fund belongs to the Equity category of ICICI Prudential Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in ICICI Prudential Value Discovery Fund via lump sum is ₹1,000 and via SIP is ₹100.
| Min Investment Amt | ₹1,000 |
|---|---|
| AUM | ₹27,515Cr |
| 1Y Returns | 11.9% |
Fund Performance: The UTI Value Opportunities Fund has given 16.13% annualized returns in the past three years and 11.39% in the last 5 years. The UTI Value Opportunities Fund belongs to the Equity category of UTI Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in UTI Value Opportunities Fund via lump sum is ₹5,000 and via SIP is ₹500.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹7,018Cr |
| 1Y Returns | 3.4% |
Fund Performance: The IDFC Sterling Value Fund has given 23.05% annualized returns in the past three years and 10.13% in the last 5 years. The IDFC Sterling Value Fund belongs to the Equity category of IDFC Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in IDFC Sterling Value Fund via lump sum is ₹5,000 and via SIP is ₹100.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹5,178Cr |
| 1Y Returns | 3.8% |
Fund Performance: The Templeton India Value Fund has given 22.1% annualized returns in the past three years and 10.04% in the last 5 years. The Templeton India Value Fund belongs to the Equity category of Franklin Templeton Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Templeton India Value Fund via lump sum is ₹5,000 and via SIP is ₹500.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹826Cr |
| 1Y Returns | 9.8% |
Fund Performance: The Nippon India Value Fund has given 18.36% annualized returns in the past three years and 10.22% in the last 5 years. The Nippon India Value Fund belongs to the Equity category of Nippon India Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Nippon India Value Fund via lump sum is ₹500 and via SIP is ₹100.
| Min Investment Amt | ₹500 |
|---|---|
| AUM | ₹4,849Cr |
| 1Y Returns | 2.5% |
Fund Performance: The HSBC Value Fund has given 17.99% annualized returns in the past three years and 9.28% in the last 5 years. The HSBC Value Fund belongs to the Equity category of HSBC Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in HSBC Value Fund via lump sum is ₹5,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹8,076Cr |
| 1Y Returns | 5.0% |
Fund Performance: The IDBI Long Term Value Fund belongs to the Equity category of IDBI Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in IDBI Long Term Value Fund via lump sum is ₹5,000 and via SIP is ₹500.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹99Cr |
| 1Y Returns | 5.2% |
Fund Performance: The HDFC Capital Builder Value Fund has given 16.24% annualized returns in the past three years and 8.24% in the last 5 years. The HDFC Capital Builder Value Fund belongs to the Equity category of HDFC Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in HDFC Capital Builder Value Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹5,497Cr |
| 1Y Returns | 2.9% |
Fund Performance: The JM Value Fund has given 16.16% annualized returns in the past three years and 9.97% in the last 5 years. The JM Value Fund belongs to the Equity category of JM Financial Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in JM Value Fund via lump sum is ₹5,000 and via SIP is ₹500.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹167Cr |
| 1Y Returns | 5.5% |
Fund Performance: The Tata Equity PE Fund has given 14.81% annualized returns in the past three years and 8.52% in the last 5 years. The Tata Equity PE Fund belongs to the Equity category of Tata Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Tata Equity PE Fund via lump sum is ₹5,000 and via SIP is ₹150.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹5,323Cr |
| 1Y Returns | 5.8% |
Fund Performance: The Quantum Long Term Equity Value Fund has given 14.56% annualized returns in the past three years and 7.67% in the last 5 years. The Quantum Long Term Equity Value Fund belongs to the Equity category of Quantum Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Quantum Long Term Equity Value Fund via lump sum is ₹500 and via SIP is ₹500.
| Min Investment Amt | ₹500 |
|---|---|
| AUM | ₹879Cr |
| 1Y Returns | 7.0% |
Fund Performance: The Indiabulls Value Fund has given 14.06% annualized returns in the past three years and 4.57% in the last 5 years. The Indiabulls Value Fund belongs to the Equity category of Indiabulls Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Indiabulls Value Fund via lump sum is ₹500 and via SIP is ₹500.
| Min Investment Amt | ₹500 |
|---|---|
| AUM | ₹10Cr |
| 1Y Returns | 0.8% |
Fund Performance: The Aditya Birla Sun Life Pure Value Direct Fund has given 14.94% annualized returns in the past three years and 1.93% in the last 5 years. The Aditya Birla Sun Life Pure Value Direct Fund belongs to the Equity category of Aditya Birla Sun Life Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Aditya Birla Sun Life Pure Value Direct Fund via lump sum is ₹1,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹1,000 |
|---|---|
| AUM | ₹4,037Cr |
| 1Y Returns | 0.2% |
Fund Performance: The DSP Value Fund belongs to the Equity category of DSP Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in DSP Value Fund via lump sum is ₹500 and via SIP is ₹500.
| Min Investment Amt | ₹500 |
|---|---|
| AUM | ₹578Cr |
| 1Y Returns | 3.7% |
Fund Performance: The Quant Value Fund belongs to the Equity category of Quant Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Quant Value Fund via lump sum is ₹5,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹615Cr |
| 1Y Returns | 9.4% |
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