The good news is that value funds offered respectable double-digit returns in the 10-year horizon. Two toppers in the category offered a little over 18%. Four other value schemes offered over 16% returns in 10 years. Considering the prolonged underperformance of the value fund category between 2018 and 2019, the performance is really impressive.
The value funds are benchmarked against Nifty500-TRI and S&P BSE 500-TRI. Nifty500-TR and S&P BSE 500-TRI offered 14.27% and 14.44% returns respectively in the 10-year horizon.
Note, this is not a recommendation. This exercise- as the headline says is just a scorecard in the 10-year horizon. You should consider investing in value funds only if you are interested or subscribe to the value investing strategy. It should also be part of your overall investment allocation strategy. Mutual fund managers say investors can invest 10-20% of their overall long-term portfolio in value funds. However, you should keep in mind that value investing may be out of fashion for a long period. Remember, the period between 2018-2019, when value funds were severely underperforming. You should resist the temptation to get out of value funds during such trying times. You should remind yourself that the value theme always comes back. This is why mutual fund advisors recommend value schemes only to sophisticated investors who understand the significance of value investing over a long period.
If you are looking to invest in value mutual funds, here are our recommended schemes: Best value funds to invest in 2023
