Shutterstock.comICICI Prudential Mutual Fund has decided to merge Value Fund-Series 19, one of its largest closed-ended fund, into the Value Discovery Fund, an open-ended scheme. The merger will help unitholders in Value Fund Series-19, scheduled to mature on June 24, to remain invested in the value theme as the fund house thinks this cycle has not fully played out.
“Since September-October 2020, we have seen value investing performing better and normally such cycles play out for longer periods benefiting investors with very good long-term returns,” said S Naren, CIO, ICICI Prudential AMC.
Value investing involves buying stocks that are beaten down and below their intrinsic value.
ICICI Prudential Value Discovery Fund with assets of ₹17,825 crore as of April 30 has returned 72.74% and 10.94% in the past one and three years respectively against the benchmark Nifty 500 Value 50 TRI’s gain of 115% and 9.63% respectively. If all unitholders agree to the merger, Value Discovery Fund’s assets will rise to over ₹19,700 crore.
Analysts said the value strategy has just started delivering recently as the growth theme — bets on companies whose earnings are growing steadily— has dominated the global markets in the past decade.
From September 1, 2020, till April 30, 2021, Nifty 500 Value 50 is up by 51% as compared to Nifty 50’s gains of 28%. With the long-term outlook for the dollar weak and the government focusing on building infrastructure, investors expect the value theme to outperform.
Financial planners recommend rolling over the investments into the Value Discovery Fund.
“The value theme is expected to do well as economic growth picks up and given the low valuations there is alow downside risk,” said Rupesh Bhansali, head-distribution, GEPL Capital.
“Since the closed-end fund has outperformed its benchmark indices over three years and is merging into a scheme with a similar philosophy, investors who do not need the money for any specific goal can move to the new scheme,” said S Shankar, founder, Credo Capital.
“Since September-October 2020, we have seen value investing performing better and normally such cycles play out for longer periods benefiting investors with very good long-term returns,” said S Naren, CIO, ICICI Prudential AMC.
Value investing involves buying stocks that are beaten down and below their intrinsic value.
Launched on January 18 during the previous peak of thee years, beating its benchmark S&P 500 Index TRI which gave 69.15% and 11.55% respectively.
ICICI Prudential Value Discovery Fund with assets of ₹17,825 crore as of April 30 has returned 72.74% and 10.94% in the past one and three years respectively against the benchmark Nifty 500 Value 50 TRI’s gain of 115% and 9.63% respectively. If all unitholders agree to the merger, Value Discovery Fund’s assets will rise to over ₹19,700 crore.
Analysts said the value strategy has just started delivering recently as the growth theme — bets on companies whose earnings are growing steadily— has dominated the global markets in the past decade.
From September 1, 2020, till April 30, 2021, Nifty 500 Value 50 is up by 51% as compared to Nifty 50’s gains of 28%. With the long-term outlook for the dollar weak and the government focusing on building infrastructure, investors expect the value theme to outperform.
Financial planners recommend rolling over the investments into the Value Discovery Fund.
“The value theme is expected to do well as economic growth picks up and given the low valuations there is alow downside risk,” said Rupesh Bhansali, head-distribution, GEPL Capital.
“Since the closed-end fund has outperformed its benchmark indices over three years and is merging into a scheme with a similar philosophy, investors who do not need the money for any specific goal can move to the new scheme,” said S Shankar, founder, Credo Capital.
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