Value fund category lost 3.38% in Jan-March quarter; Quant Value Fund lost 8.73%

The value/contra mutual fund category lost around 3.38% in the January-March quarter in 2023. The value/contra fund schemes are benchmarked against Nifty 50 - TRI, Nifty 500-TRI, NIFTY500 Value 50 - TRI, and S&P BSE 500 - TRI. They lost 4.03%, 5.66%, 2.30%, and 5.66% respectively in the quarter.

There were 22 schemes in the category. Only DSP Value Fund managed to offer positive returns. The scheme offered 0.45% return during the January-March quarter in 2023. All the other schemes in the category gave negative returns. Top losers in the category lost around 9%. Quant Value Fund lost the most around 8.73% in the quarter that ended in March 2023.

Around five value/contra schemes lost around 1%, another five lost 5%, and six schemes lost 2%. Three schemes lost around 4%. SBI Contra Fund lost the lowest of around 1.08% in the quarter that ended in March 2023.



Out of 22 schemes in the category, 15 schemes managed to outperform their benchmarks.

As per recent AMFI data, the value/contra fund category in the quarter that ended in March 2023, received a total inflow of Rs 2,520.43 crore. The category received the highest inflow of Rs 1,043.98 crore in March. The net asset under management for the value/contra fund category as on March 31, 2023 was Rs 90,583.60 crore.

Value or contra funds invest in undervalued stocks or stocks that are not favoured by the market. They then wait for the market to realise the full potential of these stocks. This makes the strategy risky. Sometimes the market may take a long time to reward such stocks. They tend to suffer in a bull market when everyone is chasing stocks unmindful of the valuations. That is why these funds are only recommended to mature or evolved investors who subscribe to value investing principles and have a long investment horizon. Mutual fund managers ask investors to invest only 20% of the total portfolio in value funds.

If you are a fan of value investing, see our recommendations: Best value mutual funds to invest in 2023