Before investing in a mutual fund scheme, investors tend to examine its past returns and a host of other aspects, including the reputation of the fund house, macro-economic factors and the scheme’s category.
One of the key factors that determine a scheme’s reputation is the ability to beat its benchmark index, which is a standard against which the performance of a mutual fund scheme can be measured.
Beating the benchmark
The ability to beat the benchmark index is one key criterion for determining whether a mutual fund scheme is worth investing in. Here, we examine some value mutual funds which gave good performance in the past 10 years and beat the benchmark index.
The top-performing value schemes include HSBC Value Fund, JM Value Fund and Nippon India Value Fund.
Other high-performing schemes include ICICI Prudential Value Discovery Fund and Tata Equity PE Fund.
| Value Fund | 10-year-return | Benchmark (%) |
| HSBC Value Fund | 19.20 | 15.02 |
| JM Value Fund | 18.89 | 15.16 |
| Nippon India Value Fund | 17.54 | 15.02 |
| ICICI Prudential Value Discovery Fund | 17.14 | 15.02 |
| Tata Equity PE Fund | 17.18 | 15.02 |
| Templeton India Value Fund | 16.37 | 15.02 |
| Aditya Birla Sun Life Pure Value Fund | 13.95 | 15.02 |
(Source: AMFI)
To put this in perspective, if an investor had invested ₹1 lakh in HSBC Value Fund 10 years ago, it would have grown to ₹5.79 lakh
Likewise, the same investment would have grown to ₹5.64 lakh in the case of JM Value Fund, which gave an 18.89 per cent return.
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Similarly, an investment of ₹1 lakh in Nippon India Value Fund would have grown to ₹5.03 lakh in 10 years.
Investors should, meanwhile, understand that the high returns given by a scheme in the past do not guarantee future returns. So, it is not recommended to opt for a scheme solely on the basis of its past returns.
(Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment-related decision.)
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Published: 31 May 2024, 07:16 PM IST