MF Tracker: Nippon India Value Find turns Rs 10,000 SIP to Rs 1.56 crore in 21 years

Nippon India Value Fund has turned Rs 10,000 monthly investment to Rs 1.56 crore in 21 years, an analysis by ETMutualFunds showed. Launched on June 8, 2005, the fund is assigned four star rating by Value Research and Morningstar both.

If an investor invested Rs 10,000 in this fund 10 years ago, the value of this investment would have been Rs 27.06 lakh with an XIRR of 15.71%. If the same investment was made five years ago, the value would have been Rs 8.19 lakh with an XIRR of 12.75%. And lastly, the value in the last three years would have been Rs 3.90 lakh with an XIRR of 5.56%.

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A lumpsum investment of Rs 1 lakh made in this fund at the time of inception would have been Rs 21.78 lakh with a CAGR of 15.79%. If the same investment was made 10 years ago, the value would have been Rs 4.25 lakh with a CAGR of 15.56%.

If the investor invested the same lumpsum investment five years ago, the value would have been Rs 1.61 lakh with a CAGR of 17.23%. In the last three years, the value of same lumpsum investment would have been Rs 1.61 lakh with a CAGR of 17.23%.

What does the fund manager say?

Dhrumil Shah, Fund Manager - Equity: We keep seeking ideas which are disrupted by short term events where good businesses are available at bargain valuations compared to their historical valuations. Not investing into themes where valuations are in Frenzy zone and are at significant premium to overall markets and avoid value traps where there is uncertainty on terminal valuation. Keeping portfolio quality excellent by buying businesses with strong balance sheets, cash flows and strong track record at reasonable valuations rather than keep looking for absolute cheap valuations.

In the last 10 calendar years, the fund has delivered negative returns in 2016 and 2018 of around 1.62% and 8.43% respectively. Among these 10 calendar years, the fund gave the highest return in 2017 of around 45.70%, followed by 42.37% in 2023.

How does an expert decode the performance?

Shivam Pathak, CFP and Founder of Asset Elixir analysed the performance and told ETMutualFunds that the fund's approach of identifying fundamentally strong but undervalued businesses and holding them with patience has been a key driver of wealth creation. Investors also benefited from the power of compounding and staying invested across multiple market cycles.

Based on the trailing returns, the performance of the fund has been on the negative side in the shorter time period whereas in the longer time horizon, the performance of the fund was on the positive side. In the shorter time period the fund has failed to outperform its benchmark and category average whereas in the longer time period, it has outperformed its benchmark and category average.

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In the last three months, the fund lost 2.35% whereas the benchmark lost 0.84% and the category average was 0.05%. In the last six months, the fund gave a negative performance of 5.94% against a negative return of 5.46% by the benchmark and a negative average of 3.44% by the category.

In the last one year, the fund lost 1.73% whereas the benchmark lost 1.15% and the category average was 0.73%. In the last three years, the fund gave 17.62% compared to 13.33% by the benchmark and 15.45% as the category average. In the last five years, the fund gave 15.33% compared to 12% by the benchmark and 13.66% as the category average.

Similar performance going ahead?

Pathak said that returns of this magnitude may be difficult to replicate, and investors should avoid anchoring expectations to historical performance. However, the core principles of value investing remain relevant, and India's long-term growth story is likely to continue creating attractive opportunities across market cycles.

Being a value fund, the fund holds 57.43% in large caps, 27.35% in mid caps, 1.41% in others, and 13.82% in small caps. In comparison to the value category, the fund is overweight on mid caps.

This value fund has the highest allocation in banks of around 26.43%, followed by 9.70% in finance. The fund had 7.40% and 7.33% in IT and Power.

The PE and PBV ratio of the flexi cap fund were recorded at 39.31 times and 4.50 times respectively whereas the dividend yield ratio was recorded at 1.26 times as of April 2026.

ETMutualFunds analysed the other key ratios of the fund in a three year period. Based on the last three years, the scheme has offered a Treynor ratio of 1.21 and an alpha of 0.30. The sortino ratio of the scheme was recorded at 0.58.

The return due to net selectivity was recorded at 0.27 and return due to improper diversification was recorded at 0.02 in the last three years.

Does the current market environment still favor value-oriented funds?

Pathak said value investing has always gone through phases of underperformance, both in India and globally. The current market environment is neither uniformly cheap nor expensive, which creates opportunities for active value managers to selectively identify businesses trading below their intrinsic value.

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Others in value basket

Around 16 value funds have completed five years of existence in the market, of which HSBC Value Fund gave the highest return of around 17.27% in the last five years, followed by ICICI Prudential Value Fund which gave 16.16% return in the same period. Sundaram Value Fund gave the lowest return of 9.68% in the last five years.

Suitability and way ahead

Pathak said that value funds are best suited for patient investors with a long-term horizon of at least 7–10 years who can remain disciplined during periods of underperformance and the outlook for value investing remains constructive, as market returns are likely to become increasingly driven by fundamentals and valuations over time.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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