Introduction:
Value funds, categorised as open-ended equity-linked schemes, are strategically designed to capitalise on undervalued companies with significant growth prospects. These are investments focused on buying shares of companies currently priced lower than they should be. Even though these companies might be undervalued for now, they have the potential to grow and give good returns in the future. Investing in value funds entails venturing into equities, inherently carrying a high-risk rating. However, they also present the potential to earn high returns. Here are some value mutual funds you can consider investing in 2024.
Best value mutual funds in 2024
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1. ICICI Prudential Value Discovery Direct Growth
ICICI Prudential Value Discovery Direct Growth is a mutual fund that primarily invests in stocks, with about 93.1% of its portfolio allocated to equity. A small portion, around 6.0%, is kept in cash for liquidity, while only 0.9% is invested in debt instruments. The fund has an expense ratio of 1.01.
If you redeem your investment within 12 months, there is an exit load of 1%. This means you must pay a fee if you withdraw your money early. The fund is managed by Sankaran Naren, Dharmesh Kakkad and Sharmila D'Mello.
As of February 21, 2024, the Assets Under Management (AUM) of ICICI Prudential Value Discovery Direct Growth stands at ₹ 39,376.48 crore.
2. Bandhan Sterling Value Fund Direct Plan-Growth
The Bandhan Sterling Value Fund Direct Plan Growth invests approximately 96.2% of its portfolio in stocks and around 3.8% in cash. The fund has a relatively low expense ratio of 0.66%, and you pay an exit load of 1% if you redeem your investment within one year if the unit exceeds 10%. The fund is managed by two fund managers, Daylynn Gerard Paul Pinto and Ritika Behera. As of February 21, 2024, the AUM of plan stands at ₹ 8,161.17 crore.
3. Templeton India Value Fund – Direct-Growth
The Templeton India Value Fund – Direct Growth has an expense ratio of 1.02%. As of the latest report, the fund size stands at ₹1,727 crore. The fund's holdings include prominent companies such as HDFC Bank, ICICI Bank, Reliance Industries, Tata Motors-DVR, and ONGC. These companies represent a significant portion of the fund's equity allocation, around 91.86%. In addition to equity holdings, the fund also has investments in net current assets/net receivables (3.94%), Real Estate Investment Trusts (REITs) (2.5%), and foreign equity (1.71%).
If you decide to redeem or switch out your units within one year of allotment, there is an exit load of 1%. The fund is managed by Anand Radhakrishnan, who oversees the investment decisions and portfolio management strategies to achieve the fund's objectives of value investing and long-term growth.
4. Tata Equity P/E Fund – Direct-Growth
The Tata Equity P/E Fund – Direct Growth has a fund size of ₹ 7,169 crore. This fund predominantly invests in equities, with approximately 96.99% of its portfolio allocated to equity holdings. Additionally, it holds a small portion of net current assets/net receivables (2.84%) and reverse repos (0.17%). Sonam Udasi manages the fund.
Regarding exit loads, if you withdraw or switch out your investment within 12 months from the date of allotment and the amount is not more than 12% of the original investment cost, there is no exit load. However, if the withdrawal or switch-out amount exceeds 12% of the original investment, a 1% exit load is applicable. After 12 months from the date of allotment, no exit load is charged on redemptions. It also has an expense ratio of 0.83%.
5. HDFC Capital Builder Value Fund – Direct-Growth
The HDFC Capital Builder Value Fund – Direct Growth has a fund size of ₹ 6,619 crore. It primarily focuses on equity investments, with about 98.17% of its portfolio allocated to equities. Additionally, the fund holds a portion in reverse repos (1.94%) and has a negligible allocation in net current assets/net receivables (-0.11%). Managed by Gopal Agrawal, the fund charges an expense ratio of 0.98%.
Regarding exit loads, if you redeem or switch out your units within one year from the date of allotment, there's an exit load of 1%. However, if you redeem or switch out your units after one year from the date of allotment, there is no exit load.
To sum it up
Value funds, focusing on undervalued companies with long-term growth potential, present an attractive opportunity to build wealth over time. Each fund offers a unique combination of investment strategies, portfolio allocations, and fund management expertise. Before you decide where to invest your money, it is important to do your homework, think about your goals and invest accordingly.
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