Value Mutual Funds
Value funds are equity mutual funds where the fund manager looks for stocks that are currently trading on discount due to some reason but have a lot of potential to grow.
Best Value Mutual Funds to Invest Today
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Canara Robeco Value Fund Direct Growth▲ 22.58%AUM ₹1264 Cr •
Expense 0.61%
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HSBC Value Fund Direct Plan Growth Option▲ 22.56%AUM ₹13603 Cr •
Expense 0.78%
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ICICI Prudential Value Discovery Fund Direct Plan Growth▲ 21.35%AUM ₹49104 Cr •
Expense 1%
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Axis Value Fund Direct Growth▲ 21.17%AUM ₹749 Cr •
Expense 0.95%
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Nippon India Value Fund - Direct Plan - Growth Option▲ 20.8%AUM ₹8542 Cr •
Expense 1.16%
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Tata Equity P/E Fund Direct Plan Growth▲ 20.4%AUM ₹8681 Cr •
Expense 0.8%
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Bandhan Sterling Value Fund Direct Plan Growth▲ 19.27%AUM ₹10036 Cr •
Expense 0.69%
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HDFC Capital Builder Value Fund -Direct Plan - Growth Option▲ 17.25%AUM ₹7429 Cr •
Expense 0.98%
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UTI Value fund Fund-Direct Growth Option▲ 17.16%AUM ₹10141 Cr •
Expense 1.14%
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Quantum Long Term Equity Value Fund Direct Growth▲ 16.76%AUM ₹1179 Cr •
Expense 1.1%
Start SIP in Value Mutual Funds as low as Rs. 50
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How does Value Funds Work?
Value mutual funds work by pooling money from multiple investors to invest in a diversified portfolio of stocks or other securities that are considered undervalued by the market. Managed by professional portfolio managers, these funds follow a value investing strategy, seeking out stocks trading below their true value as determined by factors such as earnings, dividends, and book value. The portfolio managers conduct thorough analysis to identify such undervalued opportunities, typically focusing on metrics like low price-to-earnings (P/E) ratios, low price-to-book (P/B) ratios, and high dividend yields. By actively managing the portfolio and aiming to outperform the market or a specific benchmark index, value mutual funds offer investors the potential for long-term capital appreciation and dividend income, albeit with associated risks and management fees.
Advantages on investing in value mutual funds
Value mutual funds offer several advantages for investors
Potential for Uncorrelated Returns
Value stocks may exhibit lower correlation with other asset classes like bonds or even growth stocks. This means that when other parts of your portfolio might be down, value stocks could potentially hold steady or even experience positive returns, offering a diversification benefit beyond just different sectors.
Active Management Expertise
Unlike passively managed index funds, value funds leverage the skills of experienced fund managers. Their expertise in uncovering undervalued companies and navigating market cycles can be a valuable asset, particularly for investors who don't have the time or resources to conduct their own in-depth research.
Portfolio Diversification
Value funds can add valuable diversification to your portfolio. Since they focus on different metrics than growth funds, they can help mitigate risk by reducing exposure to any one sector or market trend.
Focus on Established Businesses
Value funds often target companies with a proven track record and strong financials. This focus on established businesses can provide a degree of stability and lower overall portfolio risk compared to funds that chase high-growth startups.
Limitations of investing in value funds
Investing in value mutual funds may be suitable for individuals who have a long-term investment horizon and are comfortable with the potential risks associated with investing in undervalued assets. Here are some characteristics of investors who may consider investing in value mutual funds
Long-term Investors
Value investing is often considered a long-term strategy. Investors who are willing to hold onto their investments for an extended period, typically five years or more, may benefit from the potential growth of undervalued stocks over time.
Risk-Tolerant Investors
While value investing can offer opportunities for significant returns, it also involves risks, including the risk of investing in stocks that may remain undervalued or decline further in value. Investors should be comfortable with the potential volatility and fluctuations in value that may occur in the short term.
Patient Investors
Value investing may require patience, as it can take time for the market to recognize and correct under valuations. Investors should be prepared to wait for the market to reflect the true value of the underlying assets in the portfolio.
Points to consider before investing in Value Funds
Before investing in value mutual funds, it's important to consider several key points to make informed investment decisions
Investment Objectives
Clarify your investment goals, whether they are long-term growth, income generation, or capital preservation. Understanding your objectives will help you select value mutual funds that align with your financial goals.
Risk Tolerance
Assess your risk tolerance to determine how much volatility and fluctuations in value you are comfortable with. While value investing can offer potential returns, it also involves risks, including the possibility of investing in undervalued assets that may not perform as expected.
Time Horizon
Consider your investment time horizon, which refers to the length of time you plan to hold your investments before needing to access your funds. Value investing is typically suited for long-term investors who can weather short-term market fluctuations and allow undervalued assets to appreciate over time.
Market Conditions
Value investing tends to outperform in bear markets or periods when growth stocks are out of favor. Consider how current market conditions align with the value strategy.
How to start investing in Value Funds with INDmoney?
Now that you have understood what is Value Mutual Fund, you need to know how easily you can start your investment with INDmoney. Just follow these simple steps given below, to start your mutual fund investment journey with us.
Step 1
Download the INDmoney app and create your free investment account by completing your KYC ( Know Your Customer).
Step 2
Once your Free investment account is ready, you can either search for a Value Mutual Fund or go to the mutual fund section and tap on Value mutual funds.
Step 3
Choose a Value Mutual Fund by looking at aspects like past returns, volatility, downside capture ratio, AUM, Expense ratios and underlying stocks and sectors.
Step 4
Step 5
Choose the amount that you want to invest as SIP or LumpSum.
Step 6
Set up payments. If you choose to set up SIP in Value mutual funds, you can do a free automatic pay set up via bank mandate or UPI. If you choose to invest in lumpsum (one-time) then you can pay via UPI, netbanking, NEFT or RTGS.
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