As players in the dynamic landscape of equity markets, investors have multiple options to diversify their portfolios and leverage small, medium, and large-cap mutual funds. On further delving, the investors can also opt for Growth, Value, or Blend Funds. Growth funds are traded on stocks that show consistent growth as the name suggests, where Value funds are based on stocks that are traded at lower prices but with strong intrinsic potential. On the other hand, blend stocks are a mix of both growth and value funds. The pandemic has accelerated interest in Value funds as investors are expanding their portfolios and seeking diverse strategies to manage and grow their wealth.
Value funds are investments that require time and patience by the investor and the wait can run into several years before the returns materialise. These funds on close scrutiny can turn out to be a gold mine for investors. These stocks are generally traded at a discounted value that is much below their true worth. Investors in for the long haul should consider this investment option for a sustained run in the market.
Why Value Funds?
These funds are like sown seeds that take time to mature before they start showing any visible returns. Investors need to deploy patience in order to reap the benefits of investing in value funds. Markets with their self-correcting mechanism ensure that the prices of such value stock soar and inefficiencies are weeded out over a period of time.
Selecting a Value Fund
Studying and analysing the market is the first step for any fund manager or keen investor. Tracking such stocks during the bear and bull runs is crucial to better understand their performance. An assessment of the risk-reward ratio will help plan better and understand their latent potential. These are generally stocks that have a low price to earnings or low price to book value, but they carry a higher dividend yield and are under-owned.
Element of Risk?
As the disclaimers always state all market investments are and shall always be subject to risk, these funds aren’t risk-averse either. The risk appetite of investors is put to test once they invest in this mode of equity. These funds act like a cushion during market disruptions but may behave erratically during the bull run.
Quality of Portfolio
Investors should track the efficiency of the fund house or manager in identifying such stocks and their methodology in handling risks. The ability, skill, and experience of the fund manager or fund house are aspects that should not be neglected. Additionally, the portfolio should be adequately diversified across multiple sectors to curtail the risks of losses and maximise gains.
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY. AN INVESTOR AWARENESS INITIATIVE BY IDFC MUTUAL FUND.
To complete KYC process. investors are required to submit CKYC form along with a recent photograph, self-attested copy of PAN Card and valid address proof to any designated KYC Point of Service. For more information on KYC along with procedure to change address/ bank details/ phone numbers, etc please visit IDFC Mutual Fund website i.e. www.idfcmf.com Investors can file their complaints with the mutual fund through their designated investor service contact points. Alternatively, investors can write to us at Investormf@ldfc.com or Call us on 1800 266 6688/1800 300 666 88. Investors may also register their complaint on SEBI SCORES portal. Investors are cautioned to deal only with the Mutual Funds registered with SEBI, details of which can be verified on the SEBI website under "Intermediaries/Market Infrastructure Institutions". For more information visit, http://bit.ly/IDFC_IAP
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