Best Value Mutual Funds - 2025 Guide
The value mutual funds are a good investment choice by the Indian investors, particularly in 2025. Value mutual funds emphasize on those companies which are underestimated by the market, but are possessing good fundamentals and stable incomes. These are moderate risk and reward funds that are used by people who are interested in long term consistent growth. The factors that have made these funds to be on a roll are smart investment decisions and portfolio diversification.
What are Value Mutual Funds and Why Are They Popular in the Year 2025?
The value mutual funds purchase stocks whose market value is lower than its intrinsic value. The Indian stock market is becoming more volatile in the year 2025 hence value mutual funds will be of interest to investors who will desire to have an exposure to equity with moderate risk. The fund managers manage these funds through both fundamental analysis and market intuition in order to find bargains in the various sectors.
Key Features
- Invest in underestimated firms that have good financials.
- Diversification in different market segments.
- Concentrate on long term growth and increase in capital.
Did You Know?
Research on the topic indicated that value investing strategies perform better than growth strategies at some points with particular reference being on the downward trend in the market.
What is the Performance of Value Mutual Funds on the Hands of Indian Investors?
Value mutual funds combine money of a number of investors and invest it into a collection of value stocks. Fund managers venture into the financial ratios such as price-to-earnings, price-to-book and dividend yield to discover the possible investments. In so doing, they take advantage of market inefficiencies and seek firms with short-term stumbles and high opportunities.
Highlights
- Operated by experienced employees.
- Invest in blue-chip and mid-cap firms that have high balance sheets.
- It is appropriate to long-term investors who want to stay put and not make rapid gains.
Pros
- Fund management in the profession.
- Minimized the direct stock selection.
- Are able to give good returns in the long-term.
Cons
- May will be a poor performer in the bullish or growth oriented markets.
- It has market-linked returns, which are not fixed.
- Needs time to get the best returns.
People Also Ask
Question: Are value mutual funds more safe than growth funds in 2025?
A: There are situations when value mutual funds may lose their volatility in a market, and all equity investments are risky.
What are 2025 Top Value Mutual Funds in India?
To choose the best value mutual funds, it is necessary to compare the performance of the funds with quality of the management, expense ratio, and consistency. These are some of the top performing value mutual funds as of 2025 and their 5-year running returns.
| Name of Mutual Fund | AUM (Cr) | 5-year CAGR | Fund Manager(s) | Expense Ratio |
|---|---|---|---|---|
| HDFC Value Fund | 31,000 | 17.5% | Prashant Jain | 1.02% |
| ICICI Prudential Value Discovery | 29,750 | 16.2% | Sankaran Naren | 0.99% |
| SBI Contra Fund | 28,400 | 15.8% | Dinesh Ahuja | 1.03% |
| UTI Value Opportunities Fund | 24,800 | 15.3% | Vetri Subramaniam | 1.10% |
| Nippon India Value Fund | 18,600 | 14.6% | Manish Gunwani | 1.14% |
Highlights
- Constantly beating the Nifty Value Index.
- High and midcap exposure in stocks.
- Operated by professional fund houses.
Pros
- Tend to have lower percentage rates than active sector funds.
- Good performance in the past.
- Diversified assignment in sectors.
Cons
- May fail to give high returns at all market stages.
- The performance of a fund may change depending on the management strategy.
Did You Know?
Over 800,000 new SIPs are registered in HDFC Value Fund, and value strategies are gaining popularity among investors.
What Are The Things that Investors Need to Look at Before Investing in a Value Mutual Fund?
Before investing in a value mutual fund, investors are advised to determine their risk capacity, term of investment and their financial objectives. The unanimity and experience of fund management team should also be reviewed. Although past performance is a point of reference, it is not the sole aspect to think about.
Points to Evaluate
- Established performance of fund manager.
- Low cost ratio on increased real returns.
- Asset size and liquidity.
- Sector and stock diversification.
- Capability to withstand recession in the market.
Pros
- Risk-adjusted returns have a potential to be higher.
- Periodical checkups by fund houses.
- Benefit of economies of scale.
Cons
- Possibly not so liquid as index funds.
- More time taking to receive returns.
People Also Ask
Q: What is the duration in which one should be invested in value mutual funds?
A: It is suggested that a minimum of 5 to 7 years is required in case of fruits of market cycles.
Comparison of Value Mutual Funds with Other Equity Mutual Funds
To make an informed choice, it is important to understand the distinction between value funds and any other type of funds, e.g. growth or blend funds.
| Type of Fund | Investment Focus | Risk that is Expected to Occur | Potential Returns of the Fund | Who is it Best Suited to |
|---|---|---|---|---|
| Value Mutual Fund | Undervalued stocks | Moderate | Moderate-High, Long-term, moderate | Moderate investors |
| Growth Mutual Fund | High-growth stocks | High | High | Aggressive investors |
| Blend Mutual Fund | Both of them | Moderate | Moderate | Balanced approach |
Highlights
- The value funds are resilient in turbulent markets.
- When the market is in bull phases, growth funds are able to perform better.
- Blended funds provide a trade off, and they combine the aspects of both approaches.
Pros
- The markets tend to correct as value funds perform better in the long term.
- Reduced markets fall drawdowns.
Cons
- In high bull markets, value funds potentially do not keep up with growth funds.
Did You Know?
The reclassification of SEBI in April 2024 introduced tougher standards of categorising value and growth funds which explain comparisons that are more meaningful to retail investors.
The Pros and Cons of Investing in Value Mutual Funds
There are a number of strengths and weaknesses of value mutual funds. Their differentiation could apply to a few types of investors and not others.
Benefits
- Less downside risk in the corrections.
- Traditional returns during entire market cycles.
- Reduced price volatility than growth funds.
Risks
- Poor performance in long-term bull rallies.
- Selectivity by the fund managers in terms of stocks.
- May needs psychic forbearance to achieve.
People Also Ask
Q: Would I be able to begin SIP in a value mutual fund in 2025?
A: It is so, and the majority of the most famous value mutual funds provide SIP opportunities, beginning with INR 500 a month.
Should Value Mutual Funds Be Invested in in 2025?
Value mutual funds are recommended to those investors who possess medium risk appetite and maximum growth of their investments via long-run. Value funds can be appropriate in case you do not want such high volatility of small cap or sectoral funds, and you want superior returns than fixed deposits do.
Best Suited For
- Long investment horizon 5 years and above investors.
- Investors interested in diversification of their portfolios in equities.
- People who are going on retirement or aiming at objectives such as child schooling or buying a home.
Expert Insight
Dr Rajesh Shah, a financial consultant with Mumbai head office believes that value funds remain some of the most important portfolio stabilisers, as the market remains uncertain in 2024 and 2025.
Beginners Guide on Investing in Value Mutual Funds in India
More than ever before, it is easy to get started. Investors receive their PAN, Aadhaar and bank account and they are free to select their favorite fund online through mutual fund websites AMC sites or through financial advisors. The eKYC is a single step when investing online.
Steps
- Choose a mutual fund that is based on research.
- Select between SIP or lump sum investment.
- Complete KYC online.
- Periodical performance reviews and monitoring.
Tips
- Apply SIP in cost averaging in rupees.
- It should not be a frequent changing of funds.
- Rebalance your investment portfolio on a regular basis.
People Also Ask
Question: Will NRIs be able to invest in Indian value mutual funds?
A: Yes, the majority of the mutual funds in India will allow investment by NRI with some country specific limits.
What are the Value Mutual Funds Expected to Return in 2025?
The value mutual funds do not provide set returns because it is subject to market cycles and the stock choices made by the fund. According to the trend in the market in 2025, majority of the best value funds will have an average annualised performance of between 14 percent and 17 percent over a period of five years, depending on the market performance.
Recent Returns Snapshot
- 1 year: 9% to 12%
- 3 years: 13% to 15%
- 5 years: 14% to 17%
Major Factors that Affected Returns
- Macro economic indicators.
- Market volatility cycles.
- Fund manager strategies.
Did You Know?
On average, industry data show that value funds have performed better than the Nifty 50 index by 2.5 percent in the period of 2020 to 2024.
Is Value Funds Tax Saving in 2025?
Mutual funds that are of value are not subject to tax saving under Section 80C. But units possessed more than one year are subject to the long-term capital gains tax which is now 10 percent of gains exceeding INR 1 lakh, which is a little bit tax efficient as compared to interest income that comes as a result of deposits.
Taxation Aspects
- Taxed like equity mutual funds.
- Gains in short-term (less than 1 year) are taxed at 15 percent.
- Gains above 1 lakh that include long-term (more than 1 year) gains are subject to taxation of 10 percent.
- The dividends are included in the income of the investors and taxed at marginal rate.
People Also Ask
Q: Do value mutual fund have any lock in periods?
A: Exit loads might be applied on redeemed in less than a year and all open ended value funds lack a lock in.
Value Mutual Funds: Are They Better When Investing in SIP or Lump Sum?
Value mutual funds are good in terms of both SIP and lump sum investments. SIP route will be used in averaging the cost and controlling volatility. Lump sum investments allow investors that have excess cash in the market at times of downturn to take advantage of underpriced opportunities to the greatest extent possible.
Comparison
- SIP guarantees long-term disciplined investing.
- Lump sum will yield greater returns when timed close to market corrections.
Expert Insight
The financial planners recommend that SIPs should be continued during turbulent time to have the largest compounding gains in value mutual funds.
What To Be Wary of When Looking at Your Value Fund Portfolio?
It is important to keep up with the performance of the portfolio. Reviewing on a regular basis will keep you on track to achieve what you wanted and you will be able to switch funds in case it is not performing well and taking a different approach to investment.
Review Checklist
- Monitor the annual returns against the benchmark.
- Report any significant alteration in fund management or objective.
- Asset redistribution and sector rotation of checks.
- Quit or leave in case of poor performance in the past 2 years.
TLDR or Quick Recap
- Value mutual funds purchase cheap stocks that have high fundamentals.
- These funds will provide dependable long term returns in 2025, particularly when the times are volatile.
- Best in moderate risk aversions, longer term investors.
- SIP is the most appropriate mode of accumulating wealth in a systematic manner with value funds.
- You need to diversify and reexamine your fund to keep up with the changes in the market.
People Also Ask
Q: What is it that makes a mutual fund a value fund?
A: These funds concentrate on stocks that are undervalued in terms of such fundamentals as earnings and book value.
Q: Would you please tell me the minimum investment in a value mutual fund in India?
A: Several value funds that are considered the market leaders allow one to open a SIP with as low as INR 500 per month.
Question: Is it possible that the value mutual funds are able to out-compete inflation?
A: Value funds have historically returned higher than the rate of inflation during 5 years or more.
Q: Is investment in value mutual funds advisable to senior citizens?
A: Value funds can be appropriate in case they have a moderate risk appetite and desire a better pay than FDs.
Question: Are value mutual funds high dividend payers?
A: The majority of value mutual funds have growth preferences; dividend distributions are at the discretion and the policy of funds.
Sources
- Association of Mutual Funds in India (AMFI).
- SEBI Official Circulars.
- Morningstar India.
- Business Standard: funds-2024-Returns.
