A value mutual fund aims to invest in stocks that are trade at a price lower than their true potential — reflected by the company’s financial statements. It is believed that stock prices of some companies are not the true indicator of their true worth.
Those entities are considered intrinsically more valuable and are believed to have a lot of potential to grow. Consequently, these funds are considered good investment option to meet long-term financial goal.
According to the AMFI data, there are nearly 15 mutual funds which fall in the category of value funds. Their returns in the past one-year range between 13.91 percent to 38 percent, as on March 31, 2022, based on the scheme you choose. In most of these funds, the benchmark is Nifty500 Total return index.
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Interestingly, the funds with high returns have already received huge contributions, raising the fund size significantly. For instance, ICICI Prudential Value Discovery Fund that gave 32.38 percent return has daily AUM of ₹23,149 crore.
At the same time, L&T India Value Fund which delivered a return of 27.52 percent has AUM of ₹7,828.67 crore. UTI Value Opportunities Fund, another large fund with a total AUM of ₹6,615 crore, posted a return of 20.07 in one year, as per AMFI data on March 31.
Conversely, Quantum Long Term Equity Value Fund with an annual return of 13.91 percent has an AUM of ₹869 crore.
Returns given by value mutual funds: An indicative list
|Mutual Fund Scheme||1-yr-return (%)||3-year return (%)|
|ICICI Prudential Value Discovery Fund||32.38||20.77|
|IDFC Sterling Value Fund||38.06||20.53|
|Nippon India Value Fund||28.48||19.01|
|Templeton India Value Fund||28.48||16.26|
|L&T India Value Fund||27.52||17.98|
|JM Value Fund||22.17||16.92|
|Quantum Long Term Equity Value Fund||13.91||10.78|
|Tata Equity PE Fund||20.15||14.40|
|UTI Value Opportunities Fund||20.07||17.67|
(Source: AMFI; direct return as on March 31, 2022)
Although one year returns for most value funds are in the range of 20-38 percent, the three-year returns have been relatively muted. These returns range between 10.78 percent to 20.77 percent for most of the value funds.
The highest consistent returns in past three years were posted by ICICI Prudential Value Discovery fund that gave a return of 20.77 percent whereas IDFC Sterling Value Fund gave a return of 20.53 percent.
Nippon India Value Fund gave a return of 19.01 percent and Templeton India Value Fund posted a return of 16.26 percent. Tata Equity PE fund posted 14.40 percent per annum in past three years. The three-year return posted by UTI Value Opportunities Fund was shown to be 16.89 percent, as per AMFI data on March 31, 2022.