Investors Bullish On MFs

New Delhi: Value mutual funds (MF) have witnessed robust investor interest, garnering Rs22,757 crore in inflows in 2024, nearly double the amount seen in 2023, fueled by impressive returns generated by the segment.

This surge reflects a shift in investor focus towards fundamentally strong yet undervalued stocks. On average, value mutual funds delivered returns of over 21 per cent in 2024, with a nearly 20 per cent return over the past three years, the industry data showed. Looking ahead to 2025, it is expected that value mutual funds will continue to capture attention, particularly amid global uncertainties, Trivesh D, COO of stock trading platform Tradejini, told PTI.

He highlighted that factors such as likely RBI rate cut and geopolitical shifts, including US policies, could shape investor sentiment. In terms of inflows, the total amount into value mutual funds reached Rs 22,757 crore in 2024, a significant increase from Rs 11,927 crore in 2023, according to the Association of Mutual Funds in India (AMFI). This influx of capital contributed to a 39 per cent rise in assets under management (AUM), which surged to Rs 1.88 lakh crore by December 2024, up from Rs 1.33 lakh crore in 2023.

Several prominent value funds, such as UTI Value Fund, Axis Value Fund, Quantum Long Term Equity Value Fund and ICICI Prudential Value Discovery Fund are available for investing. These funds have given good returns in the last year. Moreover, Mahindra Manulife Value Fund, which is launching its new fund offering (NFO) on February 7, may attract investor interest.

The fund is built on three core investment pillars -- quality companies, firms in recovery mode, and sectors poised for long-term growth. It aims to create a diversified portfolio across various sectors and market capitalisations. Santosh Joseph, Co-founder and CEO of Germinate Investor Services, noted that value mutual funds saw a notable surge in inflows, largely due to strong past performance and a resurgence in key sectors.

After a period of underperformance in 2022, value funds rebounded in 2023 and continued to deliver impressive returns in 2024. This strong performance, coupled with markets reaching new highs, drew investors seeking undervalued sectors that were beginning to show substantial growth potential, he added.