Best Rated Value Mutual Fund Given Upto 161% Returns: What Is A Value Fund?

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Personal Finance
oi-Kuntala Sarkar

| Published: Monday, May 30, 2022, 14:22 [IST]

Mutual Fund investment is a matter of risk and the returns from any fund depend on the volatility of the stock markets. Here, a value fund has been discussed which has given high returns in the previous years.

IDFC Sterling Value Fund – Direct Plan – Growth

It is a value fund, and the fund has performed best in the long term for SIPs. In the last 1 year SIP return stood at 0.66%, in the last 2 years it has fetched 38.49% returns, in the last 3 years it has given 56.87% returns, in the last 5 years, it has fetched 60.76% returns. Annualized returns from IDFC Sterling Value Fund – Direct Plan’s SIP were 34.91% in the past 2 years, and 31.57% in the past 3 years.

IDFC Sterling Value Fund – Direct Plan’s absolute mutual fund returns are highest in 5 years terms and above. In the last 1 year return stood at 14.76%, in the last 2 years it has fetched 161.02% returns, in the last 3 years it has given 63.30% returns, and in the last 5 years it has given 86.01% returns. In the past 2 years, the IDFC Sterling Value Fund – Direct Plan’s annualized returns stood at 61.56%, largely outperforming the category average at 39.03%.

(Data till May 27, 2022)

NAV, ER and AUM

IDFC Sterling Value Fund – Direct Plan is a mutual fund SIP investment that has a NAV of Rs. 90.99, and the size – Of assets Under Management (AUM) of this fund is Rs. 4635.91 crore. The Expense Ratio (ER) of this fund is 0.85%, while the category average is 1.15%. ER is known as the cost of owning a mutual fund or SIP. The fund house charges this percentage for managing the fund. For the IDFC Sterling Value Fund, the ER is lower than the category average. So, it will be profitable for the investors.

Additionally, as an investor, you must check the AUM and NAV before investing. AUM is the total market value of the assets. On the other hand, NAV is the unit price. In a fund, with a lower NAV, you can buy more units of it than in a fund with a higher NAV.

This above-mentioned mutual fund SIP has been best rated with 5 Star by rating agency Crisil.

Portfolio

IDFC Sterling Value Fund – Direct Plan’s total equity holding is 94.10%, and the rest of the 3.04% is invested in other sectors. Among a total of 72 stocks, the Fund’s Large Cap Investments are 31.07%, Mid Cap Investments are 14.64%; Small-Cap Investments are 32.96%, and 15.43% investments are allocated to other funds.

The top 10 equity holdings of the fund are ICICI Bank Ltd, Jindal Steel & Power Ltd., Greenpanel Industries Ltd., Axis Bank Ltd., Indian Hotels Company Limited, Magma Fincorp Ltd., VRL Logistic Ltd., State Bank Of India, Deepak Nitrite Ltd., CG Power and Industrial Solutions Ltd.

Other funds under this category are, ICICI Prudential Value Discovery Fund – Direct Plan-Growth, JM Value Fund – (Direct) – Growth, Nippon India Value Fund – Direct Plan – Growth, etc.

(Also read: Large-cap Mutual Fund Given Upto 85% Return, Annualized Return Outperformed Category Average: Morningstar Rated)

What Is A Value Fund?

A value fund will invest in stocks that are undervalued at a certain point in time. The analysts of the mutual fund house assume these stocks have the potential to perform well in the future. The stocks are now mostly undervalued due to some temporary factors. However, with good developments of the companies, the stocks will be performing better than their peers, once the valuation will be at par.

Many investors think that investing in the value funds can be risky, considering the growth is only potential. However, the stock markets are very volatile and depend on many factors like company growth, the interest rate set by the central bank, inflation, political or economic uncertainties, etc. The small-cap and mid-cap funds are also risky. The large-cap funds are considered less risky. So, investing in the value fund depends on the investor’s risk appetite.

Disclaimer

Investing in equities/mutual funds/SIPs/debts poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, and the author are not liable for any losses caused as a result of decisions based on the article.

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Story first published: Monday, May 30, 2022, 14:22 [IST]

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