SBI Contra Fund, the oldest and the largest contra fund, turned Rs 10,000 monthly SIP to Rs 7.15 crore in the last 25 years. The scheme gave an XIRR of 20.83% in the same period.
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HDFC Capital Builder Value Fund, a value fund, turned Rs 10,000 monthly SIP to Rs 5.07 crore in the last 25 years. JM Value Fund, a value fund, turned Rs 10,000 monthly SIP to Rs 2.76 crore in the mentioned time period. The scheme gave an XIRR of 15.03% in the same time period.
We considered all value and contra funds that have completed 25 years of existence in the market. We considered regular and growth options. We calculated the XIRR from October 1999 to October 2024.
The above exercise is not a recommendation. The exercise was done to find which value and contra mutual funds turned Rs 10,000 monthly SIP to more than Rs 1 crore in the last 25 years.
One should not make investment or redemption decisions based on the above exercise. One should always consider risk appetite, investment horizon, and goal before making any investment decision
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Value funds invest in stocks with reasonable valuations. Value investors buy such stocks and wait for the market to discover these stocks. When the discovery happens, the stock prices will go up, and value investors make money.
During volatile phases these schemes fare better than schemes that stock up on expensive stocks. Value funds are recommended to only sophisticated investors with a long investment horizon.
According to the Sebi’ mandate, value and contra funds invest minimum 65% of the total assets in equity and equity related instruments and follow a value and contrarian strategy respectively.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times).