Equity: Value Oriented

What is it?

Value-oriented equity funds invest in value stocks. They follow the value investing principle, in which they aim to identify businesses trading at a low valuation due to certain reasons but have the potential to generate decent returns in the future.

Objective

The primary objective of these funds is to generate market-beating returns by investing in value stocks. They aim to invest in businesses that offer favorable valuations and risk-reward opportunities.

Suitability and opinion

We feel value-oriented funds are suitable for investors who can bear substantial risk. This category can be suitable for investors looking to generate higher returns by investing in stocks with low valuations. These funds can underperform growth funds in the short term. So, investors with a long-term mindset should invest in these funds. We feel the ideal time horizon should be more than 5 years for these funds. We believe that investors should prefer the SIP route for this category.