Looking for value funds? Here are five schemes that gave 44-64% in the last one year

Value funds found their mojo over the last 18 months after years of being in the sidelines. Before early 2020, the rise in the markets was led a small set of stocks. Over the last 12-18 months, the market rally has been broad-based with many beaten down stocks at attractive valuations rising multi-fold. Naturally, value funds benefitted from the trend. Most of these funds are heavy on mid and small-cap stocks and beaten down firms with bright prospects. For investors to wait from such funds, the timeframes must be long; at least seven-plus years. This category has been among the best across diversified funds over the last couple of years. Each fund uses metrics such as price-to-earnings (PE), price-to-book (P/B), return on equity (RoE) and other such criteria to gauge valuations.

Value funds found their mojo over the last 18 months after years of being in the sidelines. Before early 2020, the rise in the markets was led a small set of stocks. Over the last 12-18 months, the market rally has been broad-based with many beaten down stocks at attractive valuations rising multi-fold. Naturally, value funds benefitted from the trend. Most of these funds are heavy on mid and small-cap stocks and beaten down firms with bright prospects. For investors to wait from such funds, the timeframes must be long; at least seven-plus years. This category has been among the best across diversified funds over the last couple of years. Each fund uses metrics such as price-to-earnings (PE), price-to-book (P/B), return on equity (RoE) and other such criteria to gauge valuations.

IDFC Sterling Value has been around for more than 13 years and is the topper in the category. The scheme delivered 64 percent returns over the past one year, according to data from Valueresearch. It has a heavy mid and small-cap bias with over 70 percent of its portfolio invested in such stocks. Apart from financials, segments such as automobiles, FMCG and construction find prominent exposure in the fund’s holding. It manages Rs 4,207 crore in assets and charges 0.88 percent for its direct plan.

SBI Contra is the next in the list with 58.3 percent returns in the last one year. The scheme has been around since July 1999. It has a track record of taking contrarian and value bets. It invests over 55 percent of its assets in mid and small-caps, with the rest of exposure directed to large-cap stocks. It takes a diffused approach to individual stocks, thus reducing the risks. It manages Rs 3,106 crore in assets and has an expense ratio of 1.47 percent.

Templeton India Value fund delivered 51.9 percent returns in the last one year. The fund has been around for more than 25 years. Unlike other schemes in the category, this fund has a large-cap bias with over 74 percent of the assets invested in such stocks. Exposure to individual stocks is high. It manages Rs 621 crore in assets and charges 1.64 percent.

Nippon India Value comes next in the list with 46 percent returns in the last one year. It invests around 65 percent of its portfolio in mid and small-cap stocks. Financials dominate the portfolio, though construction, healthcare, healthcare and energy stocks also figure prominently. The fund manages Rs 4,368 crore in assets and levies 1.32 percent as charges.

L&T India Value delivered 44.4 percent returns in the last one year. The scheme maintains a somewhat even balance between large-caps (54 percent), and mid and small-caps (46 percent). The top few holdings in the portfolio are mostly stocks from the Nifty basket. The fund manages Rs 8,009 crore in assets and charges 0.86 percent as expense ratio.

These funds are not our recommendations. Value funds generally take long periods to play out and deliver strong returns. Investors in such schemes must be willing to wait for years of little or no returns. Consult your financial advisor before investing in mutual funds. You can also consider our MC30 list to pick high-quality funds for your portfolio.

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