Top Value Funds in India (2025)
Value funds invest in stocks considered undervalued based on fundamental characteristics. They follow an open-ended equity scheme and employ a value investment strategy, focusing on shares of companies traded at discounted rates. Investors are drawn to these stocks because they may be undervalued due to temporary factors but hold the potential for high long-term returns.
It’s crucial to distinguish value funds from contra funds. While contra funds target stocks temporarily out of favour, value funds prioritise stocks trading below their intrinsic value. The table below explores some of the top 10 value funds.
Top 10 Value Funds to Invest in 2025
Here are the top 10 value funds sorted according to 5Y CAGR:
| Fund Name | Fund Size (Rs. in cr) | Expense Ratio (%) | CAGR 5Y (%) |
|---|---|---|---|
| Bandhan Sterling Value Fund | 10,035.78 | 0.71 | 26.28 |
| ICICI Pru Value Discovery Fund | 48,987.78 | 1.00 | 26.08 |
| JM Value Fund | 1,072.74 | 0.98 | 25.40 |
| HSBC Value Fund | 13,674.92 | 0.78 | 25.34 |
| Nippon India Value Fund | 8,535.62 | 1.16 | 24.98 |
| Templeton India Value Fund | 2,199.27 | 0.86 | 24.68 |
| Aditya Birla SL Pure Value Fund | 6,416.05 | 1.03 | 23.31 |
| Tata Equity P/E Fund | 8,639.72 | 0.80 | 21.59 |
| Union Value Fund | 294.54 | 1.34 | 21.38 |
| LIC MF Value Fund | 142.70 | 1.63 | 21.20 |
Disclaimer: Please note that the above table is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing. The data is derived from Tickertape Stock Screener and is subject to real-time updates.
Note: The data on the list of the best value funds is from 31st December 2024. This data is derived from the Tickertape Mutual Funds Screener.
- Plan: Growth
- Category: Equity > Value Fund
- 5Y CAGR: Sorted from Highest to Lowest
🚀 Pro Tip: You can use Tickertape’s Mutual Fund Screener to research and evaluate funds with over 50+ pre-loaded filters and parameters.
Overview of the Value Funds in India
Bandhan Sterling Value Fund
Bandhan Mutual Fund offers the Bandhan Sterling Value Fund, an equity mutual fund managed by Daylynn Gerard Paul Pinto. As of 31st December 2024, the fund had assets under management (AUM) of Rs. 10,035.78 cr., and an expense ratio of 0.71%. Furthermore, the fund had a 3-yr CAGR of 18.73%, and a 5-yr CAGR of 26.28%.
ICICI Pru Value Discovery Fund
ICICI Prudential Value Discovery, an equity mutual fund from ICICI Prudential Mutual Fund, has been managed by Sankaran Naren and Dharmesh Kakkad since its launch. As of 31st December 2024, the fund had an AUM of Rs. 48,987.78 cr., and an expense ratio of 1.00%. Furthermore, the fund had a 3-yr CAGR of 23.63% and a 5-yr CAGR of 26.08%.
JM Value Fund
JM Value Fund Direct Plan-Growth, an equity mutual fund by JM Financial Mutual Fund, managed by Asit Bhandarkar, Gurvinder Singh Wasan, and Satish Ramanathan. As of 31st December 2024, the fund had an AUM of Rs. 1,072.74 cr., and an expense ratio of 0.98%. Furthermore, the fund had a 3-yr CAGR of 26.26% and a 5-yr CAGR of 25.40%.
HSBC Value Fund
The HSBC Value Fund is an equity mutual fund from HSBC mutual fund, debuted on an undisclosed date and is currently under the management of Gautam Bhupal and Venugopal Manghat. As of 31st December 2024, the fund had an AUM of Rs. 13,674.92 cr., and an expense ratio of 0.78%. Furthermore, the fund had a 3-yr CAGR of 24.03% and a 5-yr CAGR of 25.34%.
Nippon India Value Fund
Nippon India Value Fund is an open-ended equity mutual fund launched by Nippon Life India Asset Management (formerly Reliance Mutual Fund). The fund was launched on 29th December 29 2004, and is managed by Sandeep Tandon and Rahul Singh. As of 31st December 2024, the fund had an AUM of Rs. 8,535.62 cr., and an expense ratio of 1.16%. Furthermore, the fund had a 3-yr CAGR of 23.39% and a 5-yr CAGR of 24.98%.
Templeton India Value Fund
Franklin Templeton Mutual Fund manages the Templeton India Value Fund, a value-oriented fund that debuted on an unspecified date. The fund is currently overseen by fund managers Ajay Argal and Rajasa Kakulavarapu. As of 31st December 2024, the fund had an AUM of Rs. 2,199.27 cr., and an expense ratio of 0.86%. Furthermore, the fund had a 3-yr CAGR of 22.81% and a 5-yr CAGR of 24.68%.
Aditya Birla SL Pure Value Fund
Aditya Birla Sun Life Pure Value Fund is an equity mutual fund from Aditya Birla Sun Life Mutual Fund and Kunal Sangoi manages it. As of 31st December 2024, the fund had an AUM of Rs. 6,416.05 cr., and an expense ratio of 1.03%. Furthermore, the fund had a 3-yr CAGR of 22.05% and a 5-yr CAGR of 23.31%.
Tata Equity P/E Fund
Tata Equity PE Fund, a scheme by Tata Mutual Fund, is managed by Sonam Udasi and Amey Sathe. As of 31st December 2024, the fund had an AUM of Rs. 8,639.72 cr., and an expense ratio of 0.80%. Furthermore, the fund had a 3-yr CAGR of 22.21% and a 5-yr CAGR of 21.59%.
Union Value Fund
Union Mutual Fund offers the equity mutual fund, Union Value Fund. Hardick Bora and Sanjay Bembalkar manage the fund. As of 31st December 2024, the fund had an AUM of Rs. 294.54 cr., and an expense ratio of 1.34%. Furthermore, the fund had a 3-yr CAGR of 19.20% and a 5-yr CAGR of 21.38%.
LIC MF Value Fund
LIC MF Value Fund is an open-ended equity mutual fund offered by LIC Mutual Fund. The fund was launched on 22nd June 2004. Anand K. Rathi manages the fund. As of 31st December 2024, the fund had an AUM of Rs. 142.70 cr., and an expense ratio of 1.63%. Furthermore, the fund had a 3-yr CAGR of 19.70% and a 5-yr CAGR of 21.20%.
What is a Value Fund?
Value funds, open-ended equity schemes, focus on investing in undervalued companies with long-term growth potential. Fund managers seek stocks trading at a discount, with intrinsic values exceeding market prices. This strategy, known as value investing, aims for maximum investor profit. Value stocks, typically associated with indexes like NIFTY Value, often offer regular dividends, making them attractive for long-term investors seeking stable returns.
How do Value Funds Work?
Value fund managers seek out undervalued stocks due to various market inefficiencies. While these stocks may currently underperform, managers anticipate future growth potential. As the market recognises the true value of these stocks, their prices typically increase. Value ETFs frequently offer higher dividend yields, as fund managers carefully select stocks with minimal downside risks.
Investment Strategy of Value Funds
Value funds target stocks that the market undervalues. Fund managers conduct in-depth research to find stocks with solid fundamentals like revenue, profitability, and growth potential. They aim to invest in these stocks and profit when the market recognises their worth.
Features of Value Funds
Here are a few key features of value mutual funds:
- Asset Allocation: These mutual funds adhere to SEBI guidelines, allocating a minimum of 65% of investments to equity and equity-linked stocks.
- Risk-Reward Ratio: These value equity funds are prone to market fluctuations due to their primary investment in equity, resulting in volatility and a high-risk rating.
- Investment Caution: Investors should acknowledge the absence of guaranteed returns and be willing to accept the inherent risks associated with value mutual funds.
Factors to Consider While Investing in Value Funds
Before investing in top-value mutual funds, consider these factors:
- Past Performance: Analyze the fund’s performance over 5 to 7 years. This reveals how well the fund manager has pursued the value investing strategy across market cycles.
- Long-term Investment Horizon: Value funds are suitable for investors with a long-term outlook. Sticking to the investment horizon can yield significant returns over time.
- Expense Ratio: Like other mutual funds, value funds have an expense ratio, representing the fee for managing your investment. Be wary of frequent portfolio changes by the fund manager, which can lead to higher transaction costs.
- Market Risk: All mutual fund investments are market-linked and entail risk. Assess how the fund manager adjusts asset allocation to navigate market dynamics effectively.
Who Should Invest in Value Mutual Funds?
Those attuned to macro trends seek higher returns through selective bets. Also, individuals aim for steady, long-term growth and possess patience for value investing. They can expect moderate to high losses even during favourable market conditions.
Why Invest in Value Mutual Funds?
Investing in these funds offers significant benefits. These funds focus on undervalued stocks, avoiding those with inflated expectations, which makes them less vulnerable to market volatility. Additionally, by targeting underappreciated sectors of the economy, value funds help boost the performance and confidence of these often-overlooked stocks, contributing to overall market growth.
How to Choose the Best Value Mutual Funds?
When selecting the best value mutual funds, investors should consider several factors to make informed decisions.
- Fund Performance Analysis: Evaluate the historical performance of the mutual fund compared to its benchmark index and peers. Look for consistent returns over various market cycles.
- Fund Manager Expertise: Assess the track record and experience of the fund manager managing the value mutual fund. A skilled and experienced fund manager can make prudent investment decisions.
- Investment Strategy: Understand the investment strategy of the mutual fund, particularly its approach to identifying undervalued stocks. Look for funds that follow a disciplined and well-defined value investing approach.
- Expense Ratio and Fees: Consider the expense ratio and other fees associated with the mutual fund. Lower expenses can lead to higher net returns for investors over the long term.
- Asset Size and Liquidity: Examine the size and liquidity of the mutual fund’s assets under management (AUM). Larger funds may offer stability and access to more investment opportunities.
- Risk Management: Evaluate the mutual fund’s risk management practices, including diversification and risk-adjusted returns. Assess how the fund manages downside risk during market downturns.
How to Invest in Value Funds?
You can easily invest in value mutual funds by following these steps:
- To invest in mutual funds, you can visit an equity investment platform such as smallcase or Tickertape.
- The next step would be to research and identify the best value funds to invest in which align with your investment thesis. You can easily select and learn more about the best value funds with the help of a financial tool like the Tickertape Mutual Fund Screener. With 50+ pre-loaded filters, it helps you to create a comprehensive list by giving insights about the fund’s performance. Try it now!
- Once you have selected the funds based on different metrics and parameters, go to smallcase.com or the smallcase app, and login via your phone number. Click on ‘Discover‘ and enter the name of the specific mutual fund name in the search bar and hit enter. You can click on ‘invest now’ and select whether you want to invest a lump sum amount or start a SIP and start investing!
However, if you’re confused about which stocks to pick, you can explore smallcases:
- smallcases are readymade portfolios of stocks/ETFs, that are based on a theme idea or strategy
- They’re created and managed by SEBI-registered experts
- smallcase.com offers over 500+ stock portfolios, created by 180+ managers
- Some of the popular smallcases among new investors are as follows:
Disclosures for aforementioned smallcases
How do Value Funds Generate Returns?
Value funds generate returns through a disciplined investment approach focused on selecting undervalued stocks. Fund managers identify companies trading below their intrinsic value, often due to temporary market conditions or investor sentiment. These funds aim to capitalise on the potential for stock prices to rise as the market recognises the true worth of these companies. Additionally, value funds may benefit from dividends paid by the stocks in their portfolio, further enhancing returns over time.
Value Funds in the Current Market
In today’s market, Value Funds are attracting attention for their strong performance in a recovering economy. As the market stabilises and grows, undervalued stocks with solid fundamentals appreciate significantly, benefiting Value Fund investors.
Benefits of Investing in Value Funds
Here are a few benefits of investing in value mutual funds:
- Diversified Portfolio: Value funds offer exposure to various investment options across different market segments, fostering portfolio diversification.
- Long-Term Growth Potential: By targeting undervalued stocks, these funds aim to generate higher returns over the long term, minimising susceptibility to market fluctuations.
- Fundamental Strength: Investments within value funds typically possess strong fundamentals, increasing the likelihood of yielding steady, higher returns.
- Flexibility in Asset Selection: Fund managers can select assets based on market analysis, providing flexibility in portfolio management.
- Suitable for Beginners: Value funds offer accessible investment options with potential for growth, making them ideal for novice investors or those with limited financial knowledge.
- Investment Options: Investors can choose between direct or regular plans, with the added benefit of Systematic Investment Plans (SIP) for consistent monthly investments or lump sum options.
Risks of Investing in Value Funds
When selecting the best value mutual funds for 2024, consider the following risks:
- Stock price discovery may take longer than expected in value investing strategies.
- Low-price stocks chosen by fund managers may take several years to turn around.
- Some stocks may multiply rapidly in the short term, complicating predictions.
- Value stocks may underperform compared to estimations, potentially impacting investment portfolios.
Taxability of Value Funds
Value funds are taxed as equity funds, and understanding the latest tax regulations on equity mutual funds is essential for making informed investment decisions. The Union Budget 2024 has introduced significant changes to the taxation of equity mutual funds, simplifying the tax structure while altering rates and benefits. Here is a detailed breakdown of the new tax rules:
Short-Term Capital Gains (STCG)
If you hold equity mutual funds for less than a year, the gains from these investments are classified as short-term capital gains. According to the new budget, these gains are now taxed at a rate of 20%, which has been increased from the previous rate of 15%.
Long-Term Capital Gains (LTCG)
For equity mutual funds held for more than a year, the gains are considered long-term capital gains. The key points to note under the new budget are:
- Tax-Free Limit: Gains up to Rs. 1.25 lakh in a financial year remain tax-free. This limit has been increased from the previous threshold of Rs. 1 lakh.
- Tax Rate: Any gains above Rs. 1.25 lakh are taxed at a flat rate of 12.5%. It was previously taxed at 10%.
- Indexation: It’s important to note that the benefit of indexation, which previously allowed investors to adjust the purchase price of their assets for inflation, has been removed for all asset classes, including equity mutual funds.
Indexation is a method used to adjust the purchase price of an asset (like property or gold) for inflation over the years. This adjusted price is then used to calculate capital gains. Previously, long-term capital gains from selling property, gold, or other unlisted assets were taxed at 20%, but you could use indexation to reduce your taxable profit. The new rule simplifies the tax structure by setting a flat 12.5% tax rate for all long-term capital gains. However, it removes the indexation benefit.
Summary
| Capital Gains Tax | Holding Period | Old Rate | New Rate |
| Short-Term Capital Gains (STCG) | Less than 12 months | 15% | 20% |
| Long-Term Capital Gains (LTCG) | More than 12 months | 10% | 12.50% |
- No Indexation Benefit: This change affects the overall tax liability, potentially increasing it for long-term investors.
To Wrap It Up…
Value funds invest in company shares currently trading below their intrinsic value. They suit aggressive investors with a long-term outlook. Given their potential for delayed returns, ensure alignment with your financial goals when considering a value mutual fund for your portfolio. You can opt for lump sum or SIP investments in these funds. This article aims to inform investors, aiding them in making sound investment decisions.
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Frequently Asked Questions (FAQs) About Value Funds
Value funds are open-ended equity schemes that invest in undervalued companies with long-term growth potential. Fund managers seek stocks trading at a discount, with intrinsic values exceeding market prices. This strategy is known as value investing, and it aims for maximum investor profit.
Value Funds are for long-term investment purposes. Generally, investors invest in these funds for at least 5 years.
In today’s market, value funds can thrive on the rebound in this economy. Undervalued stocks with strong fundamentals soar in value as markets stabilise and expand, rewarding Value Fund investors. However, investors must do their research and consult a financial advisor before investing in any particular fund.
There is usually no lock-in period for value funds, and investors can exit them at any time.
Value funds must invest at least 65% of their net assets in equities and equity-linked schemes, subjecting them to taxation under equity-oriented mutual fund laws. Taxes are incurred upon investor exit or redemption and fall under capital gains tax regulations.
