While the benchmark indices have declined by over 10 percent in the past one month on account of massive FII outflow to the tune of ₹94,000 crore, investors are getting profoundly jittery over the value of their portfolio, and rightly so. Besides, the search for value stocks is getting narrower by the day.
Even evergreen indices such as Nifty IT are under tremendous pressure as it reported a decline of over 3 percent soon after spiking 4 percent on euphoria over Trump’s re-election.
Here, we list out the top performing value funds which have delivered 18 percent CAGR in the past 3 years. Let us first understand what value funds are.
Value funds
For the uninitiated, value funds are the ones which follow a value investment strategy. These mutual funds identify stocks that are currently undervalued but are expected to perform well over time as the value is unlocked.
Conversely, Contra mutual funds are equity funds which take a contrarian view on the market. As per the SEBI guidelines on categorisation of mutual funds, a fund house can offer either a Contra Fund or a Value Fund, not both. As per the latest AMFI (Association of Mutual Funds in India) data, there are 23 value or contra schemes with total asset size of ₹1.87 lakh crore out of which an inflow of ₹2,456 crore happened in October alone.
Here, we list out the eight mutual funds which have delivered over 18 percent return in the past three years.
(Source: AMFI; Regular returns as on Nov 14)
As we can see in the table above, JM Value Fund delivered 22.12 percent annualised return in the past three years and HSBC Value Fund delivered 20.41 percent return in the past three years. Other high performing schemes include Nippon India Value Fund and Tata Equity PE Fund.
When seen from the lens of size of funds, the largest value fund is ICICI Prudential Value Discovery Fund with a total asset size of ₹47,919.93 crore followed by HSBC Value Fund with asset size of ₹13,152.66 crore.
However, it is worth noting that the past returns of a mutual fund scheme do not guarantee its future returns. In other words, simply because a scheme has delivered high returns in the past does not necessarily mean that it will continue to deliver the same returns in the future as well.
Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment related decision.