Best value funds in India are a subset of equities mutual funds that invest in securities from companies with undervalued stock prices to produce capital gains over the long term.
These equities are typically undervalued for transient factors. Value investment funds could have significant profits over a long time. As a result, investors can increase the value of their portfolios by selecting the mutual funds with the best values.
The idea behind best value funds in India is to gain from investing in the stocks of firms whose shares are now trading at a discounted or undervalued but with the potential to rise over time owing to solid fundamentals. These value investment funds provide great investments for achieving long-term financial objectives.
10 Best Value Mutual Funds to Invest in 2024
Now Let’s discuss the best-value funds in India in Detail. Here we will give an overview of the Performance of the Funds and their minimum investment Amount.
| Fund Name | Category | Fund Size (in Cr) | Rating |
| ICICI Prudential Value Discovery Direct Growth | Equity | Rs. 27,515 | 4 |
| UTI Value Opportunities Fund Direct-Growth
| Equity | Rs. 7,018 | 4 |
| IDFC Sterling Value Fund Direct Plan-Growth
| Equity | Rs 5,178 | 3 |
| Templeton India Value Fund Direct Plan-Growth
| Equity | Rs.826 | 3 |
| HSBC Value Fund Direct-Growth
| Equity | Rs. 8,076 | 3 |
| Nippon India Value Fund Direct-Growth
| Equity | Rs. 4,849 | 3 |
| IDBI Long-Term Value Fund Direct-Growth
| Equity | Rs. 99 | 2 |
| JM Value Fund Direct Plan-Growth
| Equity | Rs. 167 | 2 |
| HDFC Capital Builder Direct Plan-Growth Value Fund
| Equity | Rs. 5,497 | 2 |
| Tata Equity PE Fund Direct-Growth
| Equity | Rs. 5,323 | 2 |
1. ICICI Prudential Value Discovery Direct Growth
ICICI Prudential Value Discovery Fund, which debuted in August 2004, invests primarily in a well-diversified portfolio of value equities to gain profits through a combination of dividend revenue and capital growth.
The strategy favors investing in firms selling at lower valuations than their growth potential, adhering to a large-cap bias. In the long run, the best-value funds in India outperform their peers because it stays away from betting on momentum.
Performance of this value fund in India: Over the last three and five years, the ICICI Prudential Value Discovery Fund has generated annualized returns of 25.26% and 14.24%, respectively. The equity subcategory of these best-value funds in India includes the ICICI Prudential Value Discovery Fund.
Minimum Investment Amount: The minimum investment amount in the ICICI Prudential Value Discovery Fund is 100 for a systematic investment plan (SIP) and 1,000 for a lump sum.
2. UTI Value Opportunities Fund Direct-Growth
The UTI value opportunities Fund Direct-Growth is best for those investors who understand micro trends and are ready for possible high losses. There is 98.76% investment of this best value funds in India in domestic equities. It is 49.77% in large-cap stocks, 14.75% in Midcap, 11% in small-cap, and 0.15% in debt.
Performance of this value fund in India: In the last three years, the UTI Value Opportunities Fund has generated annualized returns of 16.65% and 12.22%, respectively. The equity subcategory of value investment funds includes the UTI Value Opportunities Fund.
Minimum Amount to Invest: The minimum investment amount into this best-value fund in India is 500 for SIP and 5,000 for lump payment.
3. IDFC Sterling Value Fund Direct Plan-Growth
To produce capital appreciation through the use of a diverse portfolio of equities and securities related to equity.
It will primarily invest in small- and mid-cap equity and derivatives related to equity. In addition to mid-cap stocks and derivatives, value investment funds may also invest in other equities.
Performance of this value fund in India: The IDFC Sterling Value Fund returns have averaged 24.43% over the last three years and 11.75% in the previous five. The equity subcategory of value funds in India includes the IDFC Sterling Value Fund.
Minimum Amount to Invest: To invest in the IDFC Sterling Value Fund, you must have at least £5,000 or £100 via SIP.
4. Templeton India Value Fund Direct Plan-Growth
Templeton India Value Fund Direct Plan-Growth is the scheme introduced by the Franklin Templeton Mutual Fund. This value investment fund was launched on 1st January 2013 and currently has assets worth Rs. 826 crores. The expense ratio of the fund is 1.43%.
Performance of this value fund in India: The Templeton India Value Fund generated annualized returns of 23.03% over the last three years and 11.19% over the previous five years. Franklin Templeton Mutual Funds’ Equity division is home to the Templeton India Value Fund.
Minimum Amount to Invest: This value fund in India requires a minimum investment of 5,000 in a lump sum and 500 in a systematic investment plan.
5. HSBC Value Fund Direct-Growth
The HSBC Value Fund Direct-Growth is best for those investors who understand mico trends properly and can cope with possible high risks. This value funds in India have an investment of 97.94% in domestic equities (46.36% large cap, 19.3% Mid-cap, and 25.18% small cap stocks)
Performance of this value fund in India: The HSBC Value Fund generated annualized returns of 19.27% over the previous three years and 10.9% over the last 5. The value investment funds are a part of the HSBC Mutual Funds’ Equity subcategory.
Minimum Amount to Invest: The minimum investment amount into the HSBC Value Fund is 1,000 for SIP and 5,000 for lump payment.
6. Nippon India Value Fund Direct-Growth
Nippon India Value Fund, established in June 2005, aims to actively invest in equity/equity-related assets, primarily value equities, to achieve capital growth and produce stable returns.
A clear framework for choosing stocks has been used by the value funds in India. The plan prefers to purchase reliable companies with sustainable growth trajectories that are offered at fair prices. However, value funds in India avoid cheaper equities that seem to need to be more promising long-term to avoid value traps.
Performance of this value fund in India: The Nippon India Value Fund generated returns of 11.4% over the previous five years and 18.76% over the last three. The equity subcategory of this value investment fund includes the Nippon India Value Fund.
Minimum Amount to Invest: The minimum investment amount into the Nippon India Value Fund is 100 for SIP and 500 for lump payment.
7. IDBI Long-Term Value Fund Direct-Growth
This is the value oriental mutual fund scheme introduced by IDBI mutual funds. It was launched in 2018 on 30th July. Currently, value funds in India possess assets worth Rs. 99 crores, and the expenses ratio is 1.67%.
Performance of the Fund: The equity subcategory of best-value funds in India includes the IDBI Long-Term Value Fund.
Minimum Amount to Invest: The minimum investment amount in the IDBI Long Term Value Fund is 500 for SIP and 5,000 for lump payment.
8. JM Value Fund Direct Plan-Growth
The JM Value Fund Direct Plan-Growth is best for those investors who know microtrends and can bear high losses, and the fund is high risk. However, its overall performance is excellent. The value funds in India have an investment in domestic equities of 97.76% ( 47.37% large cap, 18.095 Midcap, and 14.76% small cap stocks)
Performance of this value fund in India: 17.1% annualized returns and 11.21% for the previous five years, respectively, were provided by these value investment funds. The Equity subcategory of JM Financial Mutual Funds includes the JM Value Fund.
Minimum Amount to Invest: JM Value Fund requires a minimum investment of 5,000 in a single sum and 500 in a systematic investment plan.
9. HDFC Capital Builder Direct Plan-Growth Value Fund
Even after the best overall market performance of the HDFC Capital Builder Direct Plan-Growth Value Fund, it possesses very high risk. This is why value funds in India are only suitable for those who can bear high losses and know all about micro trends. The value investment funds have the investment of domestic equities, 99.81%. It is divided into – 63.5% large cap, 6.93% mid-cap, and 12.62 small-cap stocks.
Performance of this value fund in India: The HDFC Capital Builder Value Fund generated annualized returns of 16.91% over the last three years and 9.19% over the previous five. The Equity division of HDFC Mutual Funds includes the HDFC Capital Builder Value Fund.
Minimum Amount to Invest: A lump sum and a systematic investment plan (SIP) of 100 are the minimum amounts needed to invest in the HDFC Capital Builder Value Fund.
10. Tata Equity PE Fund Direct-Growth
Tata Equity PE fund direct growth has the investment of 95.61% domestic equities (53.71 large cap, 15.14% mid-cap, and 11.95% small cap stocks.
Performance of this value fund in India: In the previous three years, this value funds in India’s annualized returns were 15.19%; in the last five years, they were 9.39%. The Tata Equity PE Fund is a part of Tata Mutual Funds’ Equity category.
Minimum Amount to Invest: The value funds in India require a minimum investment of 5,000 in a lump sum and 150 in a systematic investment plan.
Benefits of Investing in the Best Value Funds in India
Best value funds in India possess the following benefits:
1. Diversification of holdings
Best value funds in India invest in cheap equities across many industries. It aids portfolio diversification by restricting access to alternatives with a high risk-to-reward ratio.
2. Lower downside risk
Compared to other equity funds, best-value mutual funds in India have a lower level of volatility and downside risk. These equities are less affected by a bad market because they are already undervalued.
3. High growth potential
Over the long run, value investment funds can dramatically increase investors’ wealth and their portfolios’ value.
4. Investment strategy
Investors of best-value funds in India have two options for allocating their resources to mutual funds: a flat sum and a systematic investment plan. Individuals can invest the entire sum at once using the first option. They can make fixed payments at regular intervals into a value fund by selecting the SIP mechanism. Individuals can begin a SIP with just Rs. 100, but if they choose to invest in a lump payment, they must contribute at least Rs. 1,000. Note that depending on the scheme, this minimum quantity of best-value funds in India could change.
Things to Consider Before Investing in Best Value Funds in India
Before purchasing the best Value Funds in India 2023, investors should take the following factors into account:
1. Investment goal
Investors all have different investment objectives. Not all value fund schemes can accommodate every person’s financial goals. While some schemes can offer better returns after three years, others need seven years to reach peak yields. Therefore, it’s crucial to assess your needs and locate a value fund strategy that matches them.
2. Risk tolerance
Investors have access to various schemes, each with different risks. Depending on how the underlying equities perform, one fund may be riskier. Determining one’s risk tolerance when investing in best-value mutual funds in India is crucial.
3. Expense ratio
It is the fee that an asset management company charges investors to cover its overhead costs. Before spending their savings on best-value funds in India, people should examine the expenditure ratio of various plans and consider other things.
4. The expertise of the fund manager
The fund manager’s experience is essential when discussing the best-value mutual funds in India since it shows that the manager is knowledgeable about the industry and has a keen understanding of the market. Additionally, they must be capable of making the best choices at the appropriate times. As a result, while investing in value funds, a fund manager’s track record is an essential factor to consider.
5. History of a fund
The historical performance of the best value mutual funds in India shows if it has successfully achieved its goal since its beginning. Therefore, while engaging in best-value funds in India, one must consider the fund’s historical performance. But keep in mind that a fund’s prior performance might not continue.
6. Regular or Direct plan
Best Value mutual funds in India have two different direct and regular programs that can be chosen from. The first is provided directly by an AMC; brokers or distributors are not involved. On the other hand, investors must use distributors or brokers to sign up for a regular plan, which requires commission and brokerage. So, compared to direct plans, standard plans report a lower Net Asset Value and have a larger expenditure ratio.
Conclusion
Investors of best-value mutual funds in India should only depend heavily on past performance when choosing the best Value Fund. It is, so that past results are only sometimes indicative of future results. Instead, select the best value mutual funds in India from a mutual fund provider with a reliable investment process and systems in place, along with solid risk management techniques.
Best Value Funds in India – FAQs
What is the main drawback of best-value mutual funds?
Ans. High fees, inefficient taxation, subpar trading execution, and the possibility of management abuses are drawbacks of best-value mutual funds.
Which mutual fund type is the best?
Ans. The finest mutual funds for long-term investing are equity funds. Choose a growth mutual fund since the gains will compound over time, making it simple to achieve your long-term objectives.
Which three categories do mutual funds fall under?
Ans. According to the asset classes they invest in, mutual funds can be broadly divided into four types:
- Equities funds
- Fixed income funds
- Money market funds
- Hybrid funds
