Value Investing: Top 10 Value Mutual Funds: Value mutual funds invest in stocks of fundamentally strong companies whose current price is much lower than their fair value. When such stocks achieve their true value in the future, investors are likely to get better than average returns. This investment strategy has also become very popular due to world-renowned investors like Warren Buffett. The objective of value funds is to give excellent returns in the long term by taking advantage of market misconceptions. The returns of the country’s top 10 value funds also testify to this, which have increased the capital of their investors by three to three and a quarter times in the last 5 years. We will give information about these funds later, but before that let us understand what is the specialty of value funds and how they work.
Features of value mutual funds
1. Investment strategy: Value funds invest in stocks that are trading below their true (intrinsic) value. This strategy estimates the fair value of stocks based on fundamental analysis and attempts to take advantage of market misperceptions.
2. Long-term focus:Value funds focus on investing over the long term so that the market can recognize the true value of the stocks. This provides an opportunity for capital appreciation in the long term as the price of the stocks approaches their true value.
3. Low volatility : Value funds usually invest in companies that are fundamentally strong and have relatively stable earnings. This makes them less risky even during market downturns.
4. Potential for high returns:By investing in undervalued stocks, value funds can generate high returns when the market corrects its mistakes. Value investing has historically outperformed growth investing.
5. Diversification: These funds reduce risk by investing across sectors and have the potential to deliver high inflation-beating returns over time.
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Top 10 Value Mutual Funds and their Performance
The top 10 value mutual funds have given returns of 25 to 30 percent in the last 5 years. According to this, if someone had invested Rs 1 lakh in them 5 years ago, then his current fund value would have been between Rs 3.09 lakh and Rs 3.83 lakh.
1.JM Value Fund
- 5 Year Return (Direct Plan): 30.84%
- Asset Under Management (AUM): Rs 1,078.59 crore
- Rs 1 lakh made in 5 years: Rs 3,83,445
2. Bandhan Sterling Value Fund
- 5 Year Return (Direct Plan): 30.28%
- AUM: Rs 10,545.82 crore
- Rs 1 lakh made in 5 years: Rs 3,83,445
3.HSBC Value Fund
- 5 Year Return (Direct Plan): 29.04%
- AUM: Rs 13,876.01 crore
- Rs 1 lakh made in 5 years: Rs 3,57,785
4. ICICI Prudential Value Discovery Fund
- 5 Year Return (Direct Plan): 28.95%
- AUM: Rs 50,518.41 crore
- Rs 1 lakh made in 5 years: Rs 3,56,539
5. Templeton India Value Fund
- 5 Year Return (Direct Plan): 28.95%
- AUM: Rs 2,263.18 crore
- Rs 1 lakh made in 5 years: Rs 3,56,539
6. Nippon India Value Fund
- 5 Year Return (Direct Plan): 28.94%
- AUM: Rs 8,842.50 crore
- Rs 1 lakh made in 5 years: Rs 3,56,401
7.Tata Equity PE Fund
- 5 Year Return (Direct Plan): 26.14%
- AUM: Rs 9,010.26 crore
- Rs 1 lakh made in 5 years: Rs 3,19,348
8.UTI Value Fund
- 5 Year Return (Direct Plan): 25.85%
- AUM: Rs 10,591.25 crore
- Rs 1 lakh made in 5 years: Rs 3,15,694
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9. Aditya Birla Sun Life Pure Value Fund
- 5 Year Return (Direct Plan): 25.57%
- AUM: Rs 6,623.55 crore
- Rs 1 lakh made in 5 years: Rs 3,12,198
10.Union Value Fund
- Yearly Return (Direct Plan): 25.37%
- AUM: Rs 293.03 crore
- Rs 1 lakh made in 5 years: Rs 3,09,719
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For whom are value funds right
Value mutual funds are an option that has the potential to give good returns in the long term. If you are looking for good returns while avoiding market volatility, then investing in value funds can be beneficial for you. Being in the category of equity funds, these funds also provide income tax benefits on long-term investments. But before taking any decision, it is important to keep in mind that the past returns of a mutual fund cannot be considered a guarantee of similar performance in the future. Value funds have a lot of exposure to equity, due to which market risk is also associated with investing in them. Therefore, test your risk-taking ability before investing. The concept of value funds is especially related to long-term investment, so invest in them only if you want to invest money for a long time. Investors who want to invest for less than 5 years should stay away from them.
(Disclaimer: The purpose of this article is only to provide information about the scheme, not to recommend investment. Take any investment decision only after consulting your investment advisor.)
