Best Value Mutual Funds Based On 5 Year Sip Return October 2024

_{Published on: 11 Nov, 2024 04:20}

• JM Value Fund: Highest 5-year XIRR at 32.79%, Sharpe Ratio 1.12, moderate volatility, ideal for growth-focused investors.

• Bandhan Sterling Value Fund: 5-year XIRR of 30.63%, low standard deviation at 13.94%, strong stability for conservative investors.

• Templeton India Value Fund: 5-year XIRR of 30.37%, low max drawdown of -9.30%, great balance of growth and stability.

• Nippon India Value Fund: 5-year XIRR of 30.32%, moderate risk profile with max drawdown of -12.18%, suitable for balanced investors.

• Aditya Birla Sun Life Pure Value Fund: 5-year XIRR at 28.70%, higher volatility, fits aggressive investors with high-risk tolerance.

Value funds focus on stocks that are undervalued relative to their intrinsic worth, offering investors potential for capital appreciation with a focus on stability. In this analysis, we explore the top-performing value funds based on their 5-year XIRR, along with key risk metrics to assess the stability and risk of each fund.

The 5-year XIRR (Extended Internal Rate of Return) provides insight into a fund’s long-term performance across various market conditions. For value funds, a high 5-year XIRR suggests the fund’s success in capitalizing on undervalued stocks, positioning them as promising options for conservative, growth-focused investors.

• 5-Year XIRR: 32.79%
• Sharpe Ratio: 1.12
• Standard Deviation: 15.18%
• Max Drawdown: -14.23%

JM Value Fund leads with a 5-year XIRR of 32.79%. With a Sharpe Ratio of 1.12, it demonstrates efficient risk-adjusted returns. However, the standard deviation of 15.18% indicates moderate volatility, and the max drawdown of -14.23% suggests resilience in market downturns, making it suitable for growth-focused investors willing to accept moderate risk.

• 5-Year XIRR: 30.63%
• Sharpe Ratio: 0.85
• Standard Deviation: 13.94%
• Max Drawdown: -11.56%

Bandhan Sterling Value Fund offers a solid 5-year XIRR of 30.63%, with a Sharpe Ratio of 0.85, indicating reasonable returns for the risk. Its lower standard deviation of 13.94% and max drawdown of -11.56% make it a more conservative choice, ideal for investors seeking stable returns with lower volatility.

• 5-Year XIRR: 30.37%
• Sharpe Ratio: 0.93
• Standard Deviation: 13.94%
• Max Drawdown: -9.30%

With a 5-year XIRR of 30.37%, Templeton India Value Fund combines solid returns with a Sharpe Ratio of 0.93. The fund’s lower standard deviation and max drawdown of -9.30% make it one of the more stable options, appealing to conservative investors looking for balanced growth.

• 5-Year XIRR: 30.32%
• Sharpe Ratio: 0.93
• Standard Deviation: 14.72%
• Max Drawdown: -12.18%

Nippon India Value Fund delivers a strong 5-year XIRR of 30.32%. The Sharpe Ratio of 0.93 and standard deviation of 14.72% indicate a moderately aggressive profile. With a max drawdown of -12.18%, this fund is suitable for investors who are comfortable with slightly higher risk for growth.

• 5-Year XIRR: 28.70%
• Sharpe Ratio: 0.72
• Standard Deviation: 17.03%
• Max Drawdown: -16.67%

Aditya Birla Sun Life Pure Value Fund offers a respectable 5-year XIRR of 28.70%. However, its lower Sharpe Ratio of 0.72 and high standard deviation of 17.03% suggest higher volatility. The max drawdown of -16.67% indicates a more aggressive risk profile, making it suitable for growth-oriented investors with a higher risk tolerance.

Understanding risk metrics provides additional context for evaluating a fund’s performance and suitability for various investor profiles.

1. Sharpe Ratio: This measures risk-adjusted returns, with higher values indicating better compensation for risk. JM Value Fund (1.12) and Templeton India Value Fund (0.93) lead with higher Sharpe Ratios, suggesting efficient risk management.

2. Standard Deviation: Indicates the fund’s volatility. Lower standard deviations, as seen in Bandhan Sterling Value Fund (13.94%) and Templeton India Value Fund (13.94%), suggest more stable performance, appealing to conservative investors.

3. Max Drawdown: This measures the maximum observed loss from a peak to a trough, indicating downside risk. Funds with lower max drawdowns, like Templeton India Value Fund (-9.30%), are more resilient during market downturns.

4. Value at Risk (VaR): VaR estimates the potential loss in extreme market conditions. JM Value Fund has a higher VaR of -16.66%, implying larger potential losses, while Union Value Fund, with a lower VaR of -15.97%, represents a more conservative risk profile.

Risk-Return Balance

JM Value Fund and Templeton India Value Fund offer strong risk-adjusted returns with their higher Sharpe Ratios, making them attractive to conservative investors who prioritize stability alongside growth.

For investors focused on minimizing volatility, Bandhan Sterling Value Fund and Templeton India Value Fund are ideal choices with their low standard deviations and max drawdowns, indicating lower risk.

The 5-year XIRR highlights the growth potential of each fund. JM Value Fund and Bandhan Sterling Value Fund have delivered robust long-term returns, making them appealing for investors with a growth-oriented mindset.

 

Selecting the right value fund involves balancing growth potential with risk tolerance. For aggressive growth seekers, JM Value Fund and Nippon India Value Fund offer strong returns with moderate risk profiles. Meanwhile, Templeton India Value Fund and Bandhan Sterling Value Fund appeal to conservative investors seeking stability with substantial returns.

Each of these top-performing value funds has been evaluated on both performance and risk metrics, providing a range of options to suit various investment goals. By focusing on 5-year XIRR and key risk indicators, investors can make informed choices aligned with their financial objectives.