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In a market often dominated by momentum plays and short-term speculation, value mutual funds have quietly delivered exceptional long-term returns. According to data released on September 7, 2025, six standout value-oriented mutual funds in India have generated absolute returns ranging from 218 percent to 244 percent over the past five years. These funds have rewarded investors who stayed committed to the principles of value investing—buying fundamentally strong companies at discounted valuations and holding them through market cycles.
The performance underscores the power of disciplined investing and the resilience of value strategies, especially in volatile environments. For investors seeking long-term wealth creation, these funds offer compelling evidence that patience and fundamentals still matter.
Key Highlights from the 5-Year Performance
All six funds delivered between 218 percent and 244 percent absolute returns from September 2020 to September 2025
Annualized returns for the period hover around 28 percent, turning a ₹1 lakh investment into ₹3.44 lakh in some cases
Most funds experienced short-term volatility but recovered strongly due to robust stock selection
These funds primarily invest in undervalued companies across large-cap, mid-cap, and small-cap segments
Top 6 Value Mutual Funds with 5-Year Outperformance
Bandhan Value Fund
Absolute Return: 243.6 percent
Annualized 5-Year Return: 28 percent
Investment Strategy: Focuses on undervalued companies across market caps
Risk Profile: Moderate to high; requires long-term commitment
Notable Insight: Despite a -6 percent return in the last year, the fund’s long-term trajectory remains strong
Templeton India Value Fund
Absolute Return: 243.6 percent
Annualized 5-Year Return: 28 percent
Investment Strategy: Targets stocks with strong growth potential trading below intrinsic value
Risk Profile: Includes mid-cap and small-cap exposure; sector concentration risk
Notable Insight: One of the oldest value funds in India, known for contrarian bets
HSBC Value Fund
Absolute Return: 230.4 percent
Annualized 5-Year Return: 27 percent
Investment Strategy: Invests in companies trading below their fair value
Risk Profile: Moderate; diversified across sectors
Notable Insight: Strong recovery post-COVID due to banking and industrial picks
JM Value Fund
Absolute Return: 230.4 percent
Annualized 5-Year Return: 27 percent
Investment Strategy: Focuses on cyclical sectors and turnaround stories
Risk Profile: High; suitable for aggressive investors
Notable Insight: Outperformance driven by mid-cap exposure and early entry into infrastructure stocks
ICICI Prudential Value Fund
Absolute Return: 230.4 percent
Annualized 5-Year Return: 27 percent
Investment Strategy: Combines value investing with macroeconomic filters
Risk Profile: Balanced; includes large-cap stability
Notable Insight: Consistent performer with strong institutional backing
Nippon India Value Fund
Absolute Return: 217.6 percent
Annualized 5-Year Return: 26 percent
Investment Strategy: Invests in undervalued companies with turnaround potential
Risk Profile: Moderate; diversified across sectors
Notable Insight: Focus on domestic consumption and manufacturing revival
Why Value Funds Are Back in Vogue
Value funds tend to outperform during economic recoveries and periods of sector rotation
These funds benefit from mean reversion, where undervalued stocks eventually catch up to their intrinsic worth
With rising interest in fundamentals and earnings quality, value investing is regaining traction among retail and institutional investors
Investor Takeaways
Ideal for long-term investors with moderate-to-high risk appetite
Best suited for those who can withstand short-term volatility for long-term gains
Diversification across value funds can help mitigate sector-specific risks
Regular SIPs in these funds can enhance compounding benefits over time
Conclusion
The past five years have proven that value investing is far from outdated. These six mutual funds have not only outperformed benchmarks but also demonstrated the enduring strength of fundamentals-based investing. For investors seeking consistent long-term growth, these value funds offer a robust path forward—one built on patience, discipline, and deep market insight.
Sources: My Investment Ideas
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