What are Value Mutual Funds?
Value mutual funds are investment vehicles that focus on identifying and capitalising on undervalued stocks within the market. These funds follow a distinct investment approach known as value investing. This strategy involves seeking out companies whose stock prices are trading below their intrinsic value, indicating potential for future growth. Value funds target stocks that may be overlooked by the broader market, with the belief that over time, the market will recognise and correct the undervaluation. Patient investors looking for long-term growth often find value mutual funds to be an attractive addition to their investment portfolio.
Features of Value Funds
Highly researched
Long-term growth focus
Dividend income benefit
Benefits of Investing inValue Mutual Funds
Diversified approach
Lower entry point
Resilience against market volatility
Consistent growth potential
Who Should Invest inValue Mutual Funds
Conservative InvestorsValue funds provide a solid foundation with lower risk exposure. Conservative investors who prioritise capital preservation and are hesitant to take on high levels of risk can benefit from the stability and reliability offered by value funds. These funds invest in established companies with strong fundamentals.
- Moderate Investors
Value-oriented funds offer a well-rounded approach. Moderate investors who are willing to embrace a balanced blend of risk and reward can find value-oriented funds to be an ideal fit. These funds strike a balance between investing in undervalued stocks for growth potential and maintaining a certain level of stability.
Aggressive InvestorsTap into the potential of undervalued stocks for exponential growth. Aggressive investors with a higher risk tolerance and a focus on maximising returns may find value funds to be an attractive option. These funds provide the opportunity to invest in undervalued stocks that have the potential for significant appreciation, aligning with the aggressive investor's pursuit of high growth.
Top Performing mutual funds
| Scheme Name | 5 Y | Value Research | ||||
|---|---|---|---|---|---|---|
 ICICI Pru Value Discovery Fund - Direct (G) | 25.04% | Invest Now | ||||
ICICI Pru Value Discovery Fund (G) | 24.37% | Invest Now | ||||
 Bandhan Sterling Value Fund - Direct (G) | 24.29% | Invest Now | ||||
Bandhan Sterling Value Fund - Direct (IDCW) | 24.29% | Invest Now | ||||
FAQs
What are value funds?
Value funds invest in stocks trading below their intrinsic value, aiming for substantial future growth. These funds focus on companies that are currently undervalued by the market.
How do value funds differ from growth funds?
Value funds focus on undervalued stocks, while growth funds target companies with high potential for growth. Value funds seek out companies that are overlooked, whereas growth funds invest in companies with rapid earnings growth.
Are value funds suitable for short-term investments?
Value funds are best suited for long-term investors seeking steady growth; short-term gains might vary. The investment strategy of value funds is oriented towards long-term value realisation rather than short-term market fluctuations.
Can value funds generate regular income?
Certain value funds offer dividends, providing investors with periodic income along with capital appreciation. Dividends from value funds can offer investors a consistent stream of income in addition to potential capital gains.
What's the risk factor associated with value funds?
While value funds aim to reduce risk by investing in undervalued stocks, all investments carry some level of risk. The risk in value funds can vary based on the quality of the companies selected and broader market conditions.