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Value Mutual Funds
3 Year Average Returns
13.74%
Funds on Dhan
24
Value Funds are a type of Equity Funds that invests in the stocks of companies that are undervalued based on fundamentals. These Funds look for stocks that are trading below their intrinsic value due to temporary factors but have long-term potential. While these are the best Value Mutual Funds to invest in, you must know these 3 things before you start investing.
- Goal: Value Funds offer high growth potential. These Funds can benefit from the price appreciation of the undervalued stocks once the market recognizes their true value.
- Investment Horizon: Suitable for patient investors who can wait 7 years or more, allowing the market to recognize the true value of these stocks.
- Risk: The challenge lies in correctly identifying undervalued stocks, which means there's a risk of misjudgment.
Best Value Funds to Invest in 2026
Note: 3Y & 5Y returns are annualised. Rest everything is absolute.
Scheme | AUM (in Cr.) | Fund Age | 1W | 1M | 3M | 6M | 1Y | 3Y  | 5Y |
|---|---|---|---|---|---|---|---|---|---|
Compare | ₹ 1,877 | 5 Yrs | 3.89% | 7.46% | 2.16% | 9.69% | 8.72% | 19.11% | 15.95% |
Compare | ₹ 1,812 | 4 Yrs | 2.54% | 3.50% | -2.43% | -0.50% | 10.66% | 19.06% | 0.00% |
Compare | ₹ 368 | 8 Yrs | 2.95% | 3.89% | -0.65% | 10.68% | 19.90% | 17.70% | 13.09% |
Compare | ₹ 2,314 | 5 Yrs | 6.09% | 7.06% | 1.06% | 4.11% | 8.80% | 17.52% | 13.33% |
Compare | ₹ 8,038 | 13 Yrs | 3.94% | 7.27% | 1.42% | 9.35% | 6.91% | 16.91% | 13.46% |
Compare | ₹ 14,305 | 13 Yrs | 4.87% | 6.69% | 0.05% | 3.29% | 3.25% | 15.95% | 15.32% |
Compare | ₹ 8,009 | 13 Yrs | 4.94% | 7.50% | 2.24% | 6.07% | 1.79% | 14.08% | 13.33% |
Compare | ₹ 57,760 | 13 Yrs | 4.75% | 9.36% | 1.85% | 3.54% | -2.11% | 13.76% | 14.30% |
Compare | ₹ 6,361 | 13 Yrs | 2.92% | 4.14% | -1.10% | 4.12% | 7.66% | 13.68% | 13.58% |
Compare | ₹ 8,980 | 13 Yrs | 4.42% | 8.37% | -0.05% | 4.04% | -1.28% | 13.46% | 11.08% |
Compare | ₹ 8,222 | 13 Yrs | 4.36% | 6.11% | -2.32% | -0.69% | -3.93% | 13.42% | 12.60% |
Compare | ₹ 79 | 11 Yrs | 4.11% | 6.90% | 0.51% | 5.93% | 2.23% | 13.13% | 10.87% |
Compare | ₹ 327 | 5 Yrs | 3.71% | 4.42% | -2.65% | -0.25% | 0.42% | 12.56% | 11.39% |
Compare | ₹ 9,471 | 13 Yrs | 4.34% | 7.47% | 1.96% | 5.42% | 2.59% | 12.42% | 12.56% |
Compare | ₹ 374 | 7 Yrs | 3.40% | 6.31% | -1.40% | 3.13% | 0.29% | 12.24% | 11.74% |
Compare | ₹ 1,192 | 5 Yrs | 4.74% | 7.61% | -0.41% | 2.77% | -0.66% | 11.78% | 13.01% |
Compare | ₹ 1,054 | 20 Yrs | 4.69% | 8.87% | 0.83% | 3.63% | -2.28% | 11.69% | 9.87% |
Compare | ₹ 724 | 13 Yrs | 2.84% | 3.12% | -1.29% | 3.46% | -0.27% | 11.35% | 13.34% |
Compare | ₹ 1,779 | 13 Yrs | 4.06% | 7.33% | -0.64% | 0.69% | -3.10% | 10.32% | 11.93% |
Compare | ₹ 894 | 3 Yrs | 4.16% | 7.80% | 0.18% | 2.05% | 0.63% | 10.31% | 0.00% |
Compare | ₹ 1,195 | 13 Yrs | 4.40% | 7.02% | -0.57% | 1.99% | -4.29% | 7.99% | 7.63% |
Compare | ₹ 358 | 0 Yrs | 2.85% | 5.02% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Compare | ₹ 995 | 1 Yrs | 3.44% | 6.36% | -1.92% | 3.04% | 7.90% | 0.00% | 0.00% |
Compare | ₹ 214 | 0 Yrs | 3.83% | 7.38% | -2.40% | 0.00% | 0.00% | 0.00% | 0.00% |
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Disclaimer: Mutual fund investments carry market risks; read all scheme-related documents carefully. Past performance does not guarantee future returns.
About Value Funds
A Value Fund focuses on stocks that are undervalued compared to their intrinsic value. Value Funds choose stocks using the value-investing approach. Investors choose this fund to leverage the long-term benefit of investing in less expensive but high-return potential stocks. Here are the key features of Value Funds:
- The fund manager of this equity mutual fund selects stocks that are trading at a discount to their true value because of certain inefficiencies.
- These funds often take a bottom-up approach to investing and prioritizing individual stock selection over market timing. They use basic indicators like book value, earnings, dividends, and other financial ratios to evaluate companies.
- Value Funds may face difficulties when interest rates are low. Growth-oriented stocks typically do better in these periods. This may affect the fund's short-term performance.
Value Investing is a strategy used by some of the world's most successful investors, including Warren Buffet. It involves choosing stocks that the market may overlook but are trading below their intrinsic value. It has the potential to provide long-term capital appreciation. Value funds offer several benefits:
- Investing in a Value Fund can effectively diversify your portfolio. Because the companies in these funds are distributed throughout multiple industries, your portfolio may achieve a good risk-return balance.
- Value stock companies typically have lower valuation multiples than growth stocks (e.g., price-to-earnings or price-to-book ratios). This may increase the attraction from a valuation perspective, particularly if you prioritize purchasing assets at fair market value.
- There is a long history of success with value investment. Legendary investors like Warren Buffett and Benjamin Graham have made substantial returns by sticking to the value investing strategy.
Value Investing can be a great choice if you are comfortable with these factors:
- Value Funds are ideal for those seeking long-term growth while prioritizing stability. Remember that value funds take time to produce true rewards, so you should be prepared for progressive growth in your investments.
- Value Funds' performance can be impacted by market and economic factors. So, you should be aware of the wider market dynamics.
- Investing in discounted shares carries some risk even though value investing tries to protect against losses. These stocks might face difficulties and cannot achieve their true value rapidly. Make sure your level of risk tolerance is compatible with the possible volatility of Value Funds.
- These funds can be a better option if you can deal with short-term fluctuations in the market and have a longer time horizon. Although short-term market fluctuations are uncertain, discounted stocks are expected to increase in value over time.
Here are some considerations to find out if Value Funds are right for you:
- Fund managers choose value stocks with low market prices compared to their actual value. These funds gain their true value at a steady and slow rate as compared to growth funds. So, you need to be patient.
- Value Investing is typically seen as less speculative if compared to other investing approaches. These may be suitable if you have a conservative to moderate risk tolerance and want investments that prioritize stability and downside protection.
- In value investing the selected stocks are temporarily undervalued or experiencing challenges. You can choose value funds if you feel comfortable defying market trends and think there is a chance for sentiment to shift.
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FAQs
Value Funds operate by identifying and investing in stocks that are currently undervalued in the market but have strong fundamentals and a good potential for growth. Fund managers pick these stocks based on extensive research, aiming to benefit from their eventual market correction.
These funds are typically invested across various sectors, aiming to pick undervalued stocks from a wide range of industries. This approach helps in diversifying the investment portfolio and limits exposure to stocks with significant risk-reward ratios.
Value Funds have the potential to multiply your wealth significantly and maximize portfolio value over the long term. They aim for high growth by investing in stocks that are expected to appreciate in value once the market corrects their undervaluation.
No, Value Funds are not tax-free. Like other mutual fund investments, the profits earned from Value Funds are subject to capital gains tax, depending on the duration of the investment.
For Value Funds, if you sell your investment after a year, gains up to ₹1 lakh are exempt from tax. Any gains above this limit are taxed at 10%. For investments sold within a year, the profits are taxed at 15%. Additionally, dividends are taxed according to the your income tax slab, with TDS applicable on dividend incomes exceeding ₹5,000 in a financial year.
When looking for a value fund, it's important to consider the fund's track record, management's experience, and investment approach. It's important for you with a long-term investment horizon to consider Value Funds, as they invest in undervalued assets expected to perform well in the long run. Diversifying your holdings and assessing your risk appetite are also crucial steps in selecting the right Value Fund.
No, you don’t need a demat account to invest in Value Funds. You can easily invest through a mutual fund platform or directly with the asset management company offering the fund. This simplifies the process, allowing for direct investment without the need for a demat account.
Both lump sum and SIP (Systematic Investment Plan) have their advantages in Value Funds, depending on your financial situation and goals. SIPs allow for disciplined investing over time, potentially mitigating the impact of market volatility. Lump sum investments might be suitable if you have a significant amount of money to invest and want to capitalize on the current undervaluation of stocks.
To start an Value Fund SIP online, follow these 4 steps:
- Open Demat Account
- Choose the Value Fund you wish to invest in.
- Choose the SIP option, specifying the amount and SIP date
- Set up an auto-pay via bank account to automate the SIP payments
Yes, you can redeem your investments in Value Funds at any time. However, it's advisable to view these investments with a long-term perspective, as value investing often requires time for the market to recognize the true value of the undervalued stocks. Be mindful of any exit loads that might apply.
Value Funds don't usually have a lock-in term like some tax-saving investments do. This gives you the flexibility to manage your investments according to your financial needs and market conditions. However, value investing is best suited for long-term goals due to the nature of the investment strategy.
Value Funds, like all equity investments, carry market risks. The main risks include the possibility of selecting stocks that remain undervalued for extended periods or do not appreciate as expected. Additionally, market volatility can affect the fund's performance. Thorough research and a long-term investment horizon can help mitigate these risks.
Of course, no investment is completely risk-free, and Value Funds are no different. Although their goal is to buy stocks that are cheap and have a chance to go up in value, they are still vulnerable to market risks and instability. To handle the risks that come with Value Funds, it's important to do your research, choose a diverse strategy, and spend for the long run.
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Value Mutual Funds
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