Value mutual funds have been a preferred choice for investors seeking long-term wealth creation by investing in undervalued stocks. In this article, we deep dive into the top-performing value mutual funds in India that generated an impressive 218% to 244% absolute returns over the last five years tenure.
Earlier we have written about 12 Mutual Funds Outperformed in Last 2 Years with 75% to 118% Returns
What Are Value Mutual Funds?
Value mutual funds invest in fundamentally strong companies that are undervalued compared to their intrinsic value. These funds follow a value-investing strategy, buying quality stocks at a lower price, and holding them for long-term capital appreciation.
Key Features:
- Focus on undervalued and fundamentally strong companies
- Long-term investment horizon for wealth creation
- Ideal for investors with moderate-to-high risk appetite
List of Top 6 Value Mutual Funds with 5-Year Absolute Returns
| Mutual Fund | 5-Year Absolute Return |
|---|---|
| Bandhan Value Fund | 243.6% |
| Templeton India Value Fund | 243.6% |
| HSBC Value Fund | 230.4% |
| JM Value Fund | 230.4% |
| ICICI Prudential Value Fund | 230.4% |
| Nippon India Value Fund | 217.6% |
*Data as of 6-Sep-25
Deep Dive into Top 6 Value Mutual Funds in the last 5 years
#1 – Bandhan Value Fund
Objective: The Bandhan Value Fund focuses on identifying and investing in undervalued companies across market capitalizations to deliver long-term capital appreciation.
Annualised Returns:
- 1 Year: -6%
- 3 Years: 18%
- 5 Years: 28% (1 Lakh investment would have turned to ₹ 3.44 Lakhs now)
- 10 Years: 17%
Who Can Invest:
- Investors looking for long-term wealth creation
- Those who can handle short-term market volatility
Risk Factors:
- Market risk due to equity exposure
- Higher volatility during market corrections
- Requires long-term commitment
#2 – Templeton India Value Fund
Objective: This scheme invests in undervalued stocks with strong growth potential, aiming to generate superior returns over the long term.
Annualised Returns:
- 1 Year: -7%
- 3 Years: 19%
- 5 Years: 28% (1 Lakh investment would have turned to ₹ 3.44 Lakhs now)
- 10 Years: 16%
Who Can Invest:
- Long-term investors seeking value-based opportunities
- Moderate-to-high risk takers
Risk Factors:
- Exposure to midcap and smallcap stocks
- Sector concentration risk
- Market volatility
We have analysed this fund earlier among 30 Mutual Funds that generated 200% to 440% returns in 5 years.
#3- HSBC Value Fund
Objective: HSBC Value Fund focuses on identifying and investing in companies trading below their intrinsic value to maximize long-term gains.
Annualised Returns:
- 1 Year: -1%
- 3 Years: 24%
- 5 Years: 27% (1 Lakh investment would have turned to ₹ 3.3 Lakhs now)
- 10 Years: 18%
Who Can Invest:
- Investors with long-term goals (5+ years)
- Those who prefer diversified portfolios
Risk Factors:
- Market risks from cyclical sectors
- Price fluctuations due to valuation corrections
#4 – JM Value Fund
Objective: JM Value Fund aims to achieve capital appreciation by investing in a mix of large, mid, and small-cap undervalued stocks.
Annualised Returns:
- 1 Year: -12%
- 3 Years: 25%
- 5 Years: 27% (1 Lakh investment would have turned to ₹ 3.3 Lakhs now)
- 10 Years: 18%
Who Can Invest:
- Aggressive investors seeking undervalued opportunities
- Those comfortable with high volatility
Risk Factors:
- High exposure to small and mid-cap stocks
- Liquidity risk during market downturns
Everything is not rosy. We have listed this fund among 10 Worst Performing Mutual Funds in the last 20 years. These 10 funds have generated lowest returns among the entire mutual funds in India in 20 years time frame.
#5 – ICICI Prudential Value Fund
Objective: This fund follows a value investment style, focusing on companies available at attractive valuations.
Annualised Returns:
- 1 Year: 1%
- 3 Years: 22%
- 5 Years: 27% (1 Lakh investment would have turned to ₹ 3.3 Lakhs now)
- 10 Years: 17%
Who Can Invest:
- Investors seeking consistent long-term returns
- Those who prefer large-cap biased value stocks
Risk Factors:
- Market and sector risks
- Underperformance during growth-oriented market rallies
We analysed this earlier which was among 10 Mutual Fund Schemes with 20-Year Returns Between 1775% and 2002%
#6 – Nippon India Value Fund
Objective: Nippon India Value Fund invests in undervalued companies with strong fundamentals to deliver capital growth.
Annualised Returns:
- 1 Year: -3%
- 3 Years: 22%
- 5 Years: 26% (1 Lakh investment would have turned to ₹ 3.18 Lakhs now)
- 10 Years: 17%
Who Can Invest:
- Long-term investors aiming for portfolio diversification
- Moderate-to-high risk takers
Risk Factors:
- Higher exposure to midcap and smallcap companies
- Volatility during market corrections
Key Takeaways and Conclusion
Value mutual funds have shown stellar performance over the past five years, delivering returns of up to 244%. These funds are suitable for patient investors with a long-term perspective who can tolerate short-term volatility. Among these, Bandhan Value Fund and Templeton India Value Fund have emerged as top performers. However, investors should consult financial advisors and align these funds with their risk profile before investing.
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