Value Investing Pays Off: 6 Mutual Funds Deliver Stellar 218%–244% Returns Over 5 Years

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