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Mutual Funds: These five value funds beat the benchmark index returns in the past 3 years. Details here

Updated: 25 Nov 2022, 02:14 PM IST
TL;DR.

Three-year CAGR of value funds were in double digits ranging from 19 to 25 percent per annum. We share more details on this

Different value funds used different benchmark index for comparing their returns

Different value funds used different benchmark index for comparing their returns

While evaluating the overall performance of a mutual fund scheme, it is vital to compare the past few years' returns vis-à-vis the returns posted by its benchmark index. Here we give a lowdown on the value funds and their returns in the past three returns.  At the outset, we explain here what exactly do value funds imply.  

Value funds essentially invest in undervalued companies from a long term perspective until these companies unlock their growth potential

Beating the benchmark index returns is not easy when they are as high as 18.81 percent or 19.23 percent. However, five mutual funds managed to beat them. As we can see in the table below, UTI Value Opportunities Fund gave a return of 19.09 percent, L&T India Value Fund  delivered a return of 19.55 percent, Nippon India Value Fund gave 20.73 percent, ICICI Prudential Value Discovery Fund 25.33 and IDFC Sterling Value gave a compound annual growth rate (CAGR) of 25.90 percent in the past three years.

Value funds                                             3-year-returns Benchmark index (%)
UTI Value Opportunities Fund                                19.0918.81*
L&T India Value Fund                                                   19.5519.23**
Nippon India Value Fund                                                    20.7318.81
ICICI Prudential Value Discovery Fund                          25.3318.81
IDFC Sterling Value Fund                                      25.9019.23

(Source: AMFI; Regular returns as on Nov 15)

(*NIFTY 500 Total Return Index, **S&P BSE 500 Total Return Index)

Out of these schemes, four schemes managed to beat the benchmark index returns in the past five years barring IDFC Sterling Value Fund.

Value funds                                             5-year-returns Benchmark index (%)
UTI Value Opportunities Fund                                     13.1913.12* 
L&T India Value Fund                           10.6113.40**
Nippon India Value Fund                                     12.4113.12   
ICICI Prudential Value Discovery Fund                            14.65   13.12
IDFC Sterling Value Fund                                     11.62  13.40

The returns given by value funds in the past five years were lower than that posted in the past three years, but they were also in the double digits. Highest among these schemes was UTI Value Opportunities Fund that gave a return of 13.19 percent, whereas the lowest by L&T India Value Fund at 10.61 percent.

Key details of high-performing value funds:
 

UTI Value Opportunities Fund: It was launched on July 20, 2005. It has given a CAGR of 14.22 percent since inception. This means if someone had invested 10,000 at the time of launch, the fund scheme would have grown to 99,665 by Oct 31, 2022. 

Minimum investment in the scheme is 5,000 and monthly average AUM stood at 6,859 crore.

Its key stock constituents are HDFC Bank, ICICI Bank, Infosys, Axis Bank,, Bharti Airtel, SBI, ITC, Aditya Birla Fashion & Retail and NCA.

L&T India Value Fund: The fund was launched on January 8, 2010. Minimum application amount is 5,000. Its total month-end AUM is 8,013 crore.

The scheme (regular plan- growth) has given a return of 14.98 percent since inception. This means if someone had invested 10,000 at that time, it would have grown to 59,883 by now.

Top constituent stocks are ICICI Bank, SBI, The Federal Bank, HDFC Bank Axis Bank, Indian Bank, Kaurur Vysya Bank and Canara Bank.

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First Published: 25 Nov 2022, 02:14 PM IST