Comparte Capital Investment

Value Investing with Value Funds

Value Investing is something available at discounted price which is lower than its actual valuation

Value funds do well at early stage of economic recovery along with long term investment.


Every person needs to have a healthy financial strategy, but most of them do not know where to start. A great financial goal is a basis for planning for great saving and investing activities. An individual should know his or her financial goals in order to have specific and action-oriented investment strategies. You need to do systematic financial planning to fulfill your dreams and build wealth. When it comes to choosing a suitable investment choice, you can find plenty of options right from stocks, fixed deposits, real estate, mutual funds, public provident fund, and gold. Each of these investment options has its own risks and rewards. Mutual Funds can be the best option for those who look for a diversified and professionally managed investment choice that offers good returns. Most of us have a good understanding of growth mutual funds, but in this article, we can analyze the benefits of value investing with value funds.

What is value investing in mutual funds?

Value investing is an important category of mutual funds adopted by many successful and brilliant investors like Warren Buffet. The fund manager of equity value fund builds portfolio os tocks which are available at cheap valuations. This is a sub-category of equity scheme; investors can enjoy good returns over the long term by value investing with value mutual funds. However, it may underperform if you choose to invest it in the short term. As an investor, you must know some of the mutual fund terms, value funds, and value investing. Value funds are open-ended funds which follow the value-style of investing. Smart investors always ensure to mix different investment strategies in order to get the maximum value of an investment. You can choose a value fund to invest, which follows a value investing strategy. It is an investment option in which investors invest in value stocks that are deemed to be less in price depending on their basic characteristics.

Difference between Growth funds and Value funds

Know the difference between a growth fund and value fund helps an individual to invest better. Even though there are different types of stock mutual funds that fall under various categories, the two main classifications of them are growth funds and value funds. You can create a diversified portfolio and build a great investment strategy by understanding the difference between growth and value funds. Growth stock funds are part of mutual funds which hold growth stocks while value stock funds mainly invest in value stocks. Growth funds are stocks of companies that are expected to have a fast growth rate compared to the overall stock market, whereas value stock mutual funds sell at a lower price to earnings or other various value measures. Growth stocks work best when there are healthy corporate profits.

Value funds are income funds

The investors or fund managers look for stocks that sell at a low price or discount for value investing. They also do fundamental analysis to research and analyze corporations to check whether their stock has good value to be purchased. Even if you do not do all those research and analysis, what you need to do if you want to invest in value funds is to buy mutual funds with a value objective. Value investing funds are suitable for those who look for long-term investment goals as they are accompanied with relatively fewer risk levels compared to the remaining market. Value funds are mainly used for yield or income purpose, and investors who look for dividend payments as the main source of income choose value investing. So, it is also known as ‘income funds’. Since value funds come with the word ‘value’ in their name, it can be recognized easily. Most of the stocks and stock funds that pay dividends to their investors are considered as value funds. It is a favorite choice for many retirees because of its income feature.

Ideal for long-term growth

Since value stock funds usually pay dividends to its investors, they often known as dividend mutual funds. Value stock funds are not only for those who look for dividends as income, but it is suitable for people who prefer investments for long-term growth. Such investors choose to have dividends to reinvest them to purchase more shares. One of the great features of value investing is that the real value of an investment is based on what you are paying today instead of speculating about what you could possibly achieve after several years. The value of such investing lies in something that presently available at a discount or a lower price than its actual value.

How to find value funds

Before investing in value funds, you must know that it will not perform better always. It performs better and generates good returns only in the long run. No rocket science is involved in its investment strategy, but what you need to do is to buy cheap stock rather than high-priced one. Many well-known investors like Warren Buffet and Benjamin Graham have multiplied their capital by following the strategies of value investing. Investors who are interested in value investing needs to find companies that are selling their stocks at a large discount to its intrinsic value. A little research is advisable for those who are interested in value investing. You need to look at several companies to find a suitable one that has a good value stock. Many fund managers use high-quality tools to search for value stocks. Such tools find the right stocks considering certain metrics like P/E (price-to-earnings) ratio, cash flows, or any other financial data collected from the financial reporting of a company. As an investor, you can enhance your mutual fund portfolio with value funds. Value investing with value funds offers low down risk but offers good returns over time.

Mutual funds can be a good investment choice for people who desire to be rich and build wealth. It offers many advantages for its investors like simplicity, professional fund management, and diversification. Mutual funds come in different types and categories. If you are looking for a great mutual fund option that gives good returns in the long-term, you can consider value investing with value funds. Even if it is a great investment strategy that offers an attractive margin of safety, growth investing has been the prime investment approach adopted by most funds in India. One of the great advantages of value funds is that it can provide an excellent risk-reward proposition in the present market environment. It offers lower volatility and lower downside risk compared to the other traditional equity mutual funds. With the right mindset and patience, you can generate higher returns if you choose value investing with value funds. Learn the basics of value investing with value funds to make better returns in the long run before investing in it.

That’s why Comparte Investment team asks do you have “Nivesh Ki Aadat”.

With this one can say “Mutual Fund Sahi hai”, so let me do Nivesh