Fund Pick: Nippon India Value Fund is a consistent long-term performer

Launched in June 2005, Nippon India Value Fund has featured in the top 30 percentile of the value/contra funds category of CRISIL Mutual Funds Ranking (CMFR) for three consecutive quarters through December 2021. The fund’s month-end assets under management (AUM) increased to Rs 4,205 crore in February 2022 from Rs 3,255 crore in March 2019.

The investment objective of the scheme is to seek capital appreciation and/or to generate consistent returns by actively investing in equity/equity-related securities predominantly into value stocks. Meenakshi Dawar has been managing the fund since May 2018.

Trailing returns

The fund has outperformed the benchmark (Nifty 500 TRI) and its peers (funds ranked under the value/contra category in December 2021 CMFR) in the past 1-, 2-, 3-, 5-, 7-, and 10-year trailing periods.

To put this into perspective, Rs 10,000 invested in the fund on June 8, 2005, i.e. its inception, would have increased to Rs 1,23,109 on March 31, 2022, at an annualised rate of 16.10 per cent compared with the category and the benchmark, which would have grown to Rs 116,402 (15.71 per cent per annum) and Rs 98,054 (14.54 per cent per annum), respectively.

A systematic investment plan (SIP) is a disciplined mode of investing offered by mutual funds through which one can invest a certain amount at regular intervals. Monthly investment of Rs 10,000 for the past 10 years in the fund, totalling Rs 12 lakh, would have grown to Rs 28.28 lakh (16.36 per cent annualised returns) compared with Rs 26.80 lakh (15.36 per cent annualised returns) in the benchmark as on March 31, 2022.

Portfolio analysis

In the past three years, the fund took exposure across market capitalisation, with predominant allocation to large-cap stocks (averaging 61.31 per cent). Allocations to mid-cap and small-cap stocks averaged 23.11 per cent and 12.31 per cent, respectively.

The portfolio was diversified across 33 sectors. Banks dominated with average allocation of 19.98 per cent, followed by finance (9.92 per cent), software (8.09 per cent), pharmaceuticals (7.69 per ce­nt), and petroleum products (6.41 per cent).

During the period under analysis, the fund took exposure to 145 stocks and held 30 consistently. Infosys, ICICI Bank, HDFC Bank, Reliance Industries, and Divi’s Laboratories were the key contributors to its performance.