To be able to evaluate the worth of a mutual fund, it is important — among other things — to find out the returns given by these funds.
Here we assess the value mutual funds, particularly in past one and three years, to evaluate their profitability in short and medium terms, respectively.
What are value funds: These funds aim to invest in stocks which are believed to be undervalued on the basis of their fundamental characteristics. In other words, their intrinsic value is believed to be more than their current value, which make them a good buy.
As far as their short-term returns are concerned, these funds gave muted returns i.e., in single digits in one year, while a few top-performing funds gave high returns — in the range of 17 to 18 percent in past year.
According to the AMFI (Association of Mutual Funds in India) data as on May 31, 2022, ICICI Prudential Value Discovery Fund gave 18.53 percent return, IDFC Sterling Value Fund gave 17.44 percent return, Templeton India Value Fund gave 15.90 percent return per annum, Tata Equity PE Fund gave 10.66 percent return while Union Value Discovery Fund gave 10.99 percent return.
|Value mutual funds||1-year-return (%)|
|ICICI Prudential Value Discovery Fund||18.53|
|IDFC Sterling Value Fund||17.44|
|Templeton India Value Fund||15.90|
|Tata Equity PE Fund||10.66|
|Union Value Discovery Fund||10.99|
(Source AMFI data as on May 31, 2022)
Three-year returns: The top-performing value mutual funds gave return in the range of 15-19 percent. ICICI Prudential Value Discovery Fund gave 19.97 percent return, IDFC Sterling Value Fund gave 18.96 percent return, Nippon India Value Fund gave 15.54 percent return, Templeton India Value Fund delivered a high return of 16.3 percent, and UTI Value Opportunities Fund gave a return of 15.73 percent.
Here we give a snapshot of some of the top performing funds:
ICICI Prudential Value Discovery Fund: ICICI Prudential Value Discovery Fund (Growth) was started on August 16, 2004. Its CAGR is 19.22 percent since inception while in the past five years, it gave a return of 11.42 percent. In other words, if someone invested ₹one lakh five years ago, it would have swelled to ₹1,71,718 now.
The fund scheme's major portfolio included ONGC, Bharti Airtel, Sun Pharma, NTPC, Infosys and ICICI Bank.
IDFC Sterling Value Fund: It started on March 7, 2008. The fund scheme gave a return of 12.26 percent in past five years and 16.19 percent since inception.
In other words, if you invested ₹one lakh five years ago in the scheme, it would swelled to ₹1,78,320. At the time of inception, an investment of ₹one lakh would have grown to ₹8,47,000.
The major stock holdings include ICICI Bank, Axis Bank, SBI, Cipla, Sun Pharma, TCS, HCL, Minda Industries and Greeenpanel Industries.