Value Funds – Value Mutual Funds in India

There are different styles of investing adopted by fund managers of different schemes. These investment styles allow them to invest the corpus of the scheme efficiently. Growth, Value, and Contrarian investment strategies are the three commonly used investment styles. Based on these styles, the funds are called Growth Funds, Value Funds, and Contra Funds, respectively. Here, we will explore Value Mutual Funds and talk about some important aspects and features of these funds. 

What is a Value Fund?

In order to understand Value Mutual Fund, let’s first talk about value investing strategy. 

When an investor (or a fund manager) adopts a value investing strategy, he looks for stocks which are undervalued and trade for less than their respective intrinsic values. There are many companies in the market whose stock price is not the true indicator of their worth. They are intrinsically more valuable and have a lot of potentials to grow. The intrinsic value of a company is calculated by considering its financials, business model, competitive position, management team, etc. If the company’s market value is less than its intrinsic value, then it is considered to have ‘value’.

Therefore, a Value Fund is an equity fund which invests in stocks of companies having ‘value’.

Who should invest in Value Mutual Funds?

Many seasoned investors swear by a combination of growth and value investing as a sure method of generating wealth. However, finding the right stocks and purchasing them at the right time requires a lot of effort and awareness of the market. Most investors find the process of finding good value stocks overwhelming. Value Mutual Funds are good for such investors.

Further, value stocks are under-performing stocks which are expected to perform better in the long-term due to their strong intrinsic value. Hence, people looking to invest in value funds must have a long investment horizon.

Also, investors who have high exposure to growth stocks opt for value funds to ensure a stable return on investment in any market cycle.

Factors to consider before investing in Value Mutual Funds

We always recommend investors to look at the past performance of the fund before investing. Additionally, here are some factors that you can consider before investing in Value Mutual Funds in India:

Past performance is important

Most investors look at the performance of the fund over the past five years. While investing in a value fund, this is more critical. Looking at how the fund manager has managed to achieve the investment objective of the fund through various market cycles while following the value investing strategy will help you understand if the said scheme is good for your portfolio. Hence, ensure that you research the past performance of the fund and look at the selection of stocks in the portfolio of the scheme. Analyze and make an informed decision.

Value Investing is for long-term investors

Many investment gurus will recommend staying invested for at least 3-5 years when you are investing in equity or equity-related instruments. In value investing, this is more crucial since the fund manager invests in stocks which are underpriced due to certain market conditions. The conditions can take time to fade away before the stocks start performing again. Hence, invest in a Value Fund if you have an investment horizon of at least 5 years.

Look for a diversified Value Fund

Being an equity fund, the fund manager can choose to invest in value stocks of large-cap companies or small/mid-cap ones. Unless you are looking for n exposure to companies belonging to a specific market capitalization group, look for a value fund which diversifies across various market caps and sectors. Putting all your eggs in one basket is never an intelligent investment strategy. 

List of Value Mutual Funds in India

Based on the returns of the last five years, here are the list of value mutual funds in India.

List of Value Mutual Funds in India
Fund Name 1Y 3Y 5Y Expense Ratio Turnover Ratio Category Risk
Indiabulls Value Fund Direct Growth -14.35% 1.44% NA 1.5% 9% Equity
(Value)
Moderately High
ICICI Prudential Value Discovery Direct Growth -9.8% 3.79% 8.18% 1.26% 157% Equity
(Value)
Moderately High
L&T India Value Fund Direct Growth -10.11% 7.12% 12.28% 0.9% 25% Equity
(Value)
Moderately High
Edelweiss US Value Equity Offshore Fund Direct Growth -1.24% 8.08% 7.93% 0.72% NA Others
(FoF Overseas)
High
ICICI Prudential Value Fund Series 15 Direct Growth 2.37% NA NA 0.98% 398% Equity
(Diversified)
Moderately High
Tata Value Fund Series 1 Direct Growth -7.25% NA NA 0.41% 23% Equity
(Diversified)
Moderately High
Tata Value Fund Series 2 Direct Growth -6.57% NA NA 0.41% 28% Equity
(Diversified)
Moderately High
ICICI Prudential Value Fund Series 19 Direct Growth -1.1% NA NA 0.97% 397% Equity
(Diversified)
Moderately High
Reliance Value Fund Direct Growth -8.07% 6.72% 10.03% 1.51% 69% Equity
(Value)
Moderately High
Aditya Birla Sun Life Pure Value Direct Fund Growth -21.62% 0.52% 7.55% 0.95% 81% Equity
(Value)
Moderately High
HDFC Capital Builder Value Fund Direct Plan Growth -11.19% 8.23% 10.16% 1.16% 40% Equity
(Value)
Moderately High
UTI Value Opportunities Fund Direct Growth -8.46% 5.83% 6.37% 1.46% 28% Equity
(Value)
Moderately High
Templeton India Value Fund Direct Plan Growth -15.47% 4.31% 6.94% 1.77% 5% Equity
(Value)
Moderately High
IDFC Sterling Value Fund Direct Plan Growth -17.04% 6.66% 9.67% 1.0% 18% Equity
(Value)
Moderately High
JM Value Fund Direct Plan Growth -9.37% 7% 11.39% 2.3% 23% Equity
(Value)
High
ICICI Prudential Value Fund Series 17 Direct Growth 3.33% NA NA 0.98% 444% Equity
(Diversified)
Moderately High
Quantum Long Term Equity Value Fund Direct Growth -4.89% 4.6% 7.73% 1.28% 7% Equity
(Diversified)
Moderately High
Parag Parikh Long Term Equity Fund Direct Growth -3.09% 11.17% 12.04% 1.33% 229% Equity
(Multi Cap)
Moderately High
ICICI Prudential NV20 ETF Dividend -2.38% 12.67% NA 0.15% 77% Others
(ETFs)
Moderately High
Tata Equity PE Fund Direct Growth -9.2% 9.09% 12.73% 0.4% 26% Equity
(Value)
Moderately High


As you can see in the table above, there is a striking difference between the short-term and long-term performance of all value funds. Please note that the list provided above is not a recommendation but merely a listing of value funds in India which have performed well over the last five years. Before you decide to invest in a value fund, ensure that you assess your investment portfolio to ascertain if value investing will help you achieve better/more stable returns. Talk to an investment advisor to get a clearer picture and create an investment plan.


 

Asset Management Company
Axis Mutual Fund DHFL Pramerica Mutual Fund Principal Mutual Fund
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Reliance Mutual Fund Invesco Mutual Fund Union Mutual Fund
HDFC Mutual Fund LIC Mutual Fund Taurus Mutual Fund
SBI Mutual Fund JM Financial Mutual Fund Edelweiss Mutual Fund
ICICI Prudential Mutual Fund Baroda Pioneer Mutual Fund Essel Mutual Fund
Aditya Birla Sunlife Mutual Fund Canara Robeco Mutual Fund Mahindra Mutual Fund
UTI Mutual Fund HSBC Mutual Fund Quantum Mutual Fund
Franklin Templeton Mutual Fund IDBI Mutual Fund PPFAS Mutual Fund
IDFC Mutual Fund Indiabulls Mutual Fund IIFL Mutual Fund
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Tata Mutual Fund BNP Paribas Mutual Fund
L and T Mutual Fund Mirae Asset Mutual Fund