Value investing is the best way to get strong returns on your money.
ICICI Prudential Value Discovery Fund has given 19.7 per cent return.
Patience is of utmost importance while investing in value funds.
New Delhi. Be it the stock market or mutual funds, the investor has only one objective to get a bumper return on his money. Value investing is the best way to get strong returns on your money. World’s veteran investor Warren Buffett is also a big player in this genre.
Value Investing is to find the stock of such companies which is trading at a price lower than its actual value. That is, given the strong position of the company, the trading is happening below the height that its shares should be. By investing money in such stocks, there is a full chance of getting strong returns in the long term.
Money Management India has said in a report based on the available data of Morningstar that most of the equity funds in the country are growth-oriented. This means that investors who have invested in these funds have got profits. ICICI Prudential Value Discovery Fund has also given strong returns since its inception.
Returns around 20%
If one had invested Rs 10 lakh in the inception of ICICI Prudential Value Discovery Fund (August 16, 2004), his corpus as on July 31, 2022 would have been around Rs 2.5 crore. In these 18 years, the AUM of this fund has increased to Rs 24,694 crore. It accounts for 30 per cent of the total AUM in the value category. The annual return during this period was around 19.7 per cent, while the Nifty 50 has given a return of 15.6 per cent for the same period. By putting Rs 10 lakh there, till July 31, a total of Rs 1.30 crore would have been received.
Great option for SIP
Value investing offers strong returns in the long run, so it can be a great option for those investing through SIPs. Think of it in a way that if someone had invested Rs 10,000 monthly through SIP after the inception of the fund, then his total invested amount till now would have been Rs 21.6 lakh. But, by July 31, 2022, this amount would have increased to Rs 1.20 crore at the rate of 17.3 per cent per annum.
The patient will become a millionaire
S Naren, ED and CIO, ICICI Prudential AMC, which manages the fund, says patience is of utmost importance while investing in a value fund, as there will be phases of the market when the value is weak. Hence, investors will need to be patient and stay invested and when the cycle turns, history has witnessed that patience pays off. Value focuses on investing in sectors that are out of favor but have a lot of long term potential.
Apart from this, investors need to understand the investment performance and methodology of AMCs and individual funds while choosing mutual funds. This will give them an idea of when and how this fund will perform in comparison to other funds, but it is not easy to do so. The industry rarely uses terms like value investing.
FIRST PUBLISHED : September 06, 2022, 15:27 IST