ICICI Prudential Value Discovery Fund, among the most popular value funds in the market, has completed 19 years. With assets under management (AUM) of Rs. 32,659.44 crores, the fund accounts for nearly 30 percent of the total AUM in the value category.
The scheme started operations on August 16, 2004. The scheme is managed by Sankaran Naren and Dharmesh Kakkad. However, the scheme name has become synonymous with Sankaran Naren, who has been managing this fund since January 2021. The benchmark of this scheme has been revised from Nifty 500 Value 50 TRI to Nifty 500 TRI w.e.f. January 01, 2022.
The scheme went through a long tough time a few years ago but managed to make a strong comeback. Since its inception, the scheme has managed to offer a CAGR of 20 percent in the last 19 years. Hence, a lump sum investment of Rs 10,000 at the time of inception, would have become approximately Rs 3,20,000.
Also, a lump sum of Rs 10 lakh at the time of inception, as of July 31, 2023, would be worth approximately Rs 3.1 crore i.e. a CAGR of 20 percent. This return is considerably higher than the Nifty 50 index. A similar investment in Nifty 50 would have yielded a CAGR of 15.6 percent at approximately Rs. 1.5 crore.
The scheme follows a value investment style by investing in a diversified portfolio of stocks that have attractive valuations but are quoting at a discount to their intrinsic value.
“The greatest of the investing gurus, be it Warren Buffett, Seth Klarman, Joel Greenblatt etc. are all proponents of value investing as the way to build long-term wealth. We at ICICI Prudential AMC Ltd believe value as an investment style is here to stay as investors are increasingly becoming aware of what constitutes value and why it must be followed diligently. But the caveat here is that value can test one’s patience at times. We may have to wait for a long time for value to deliver on its promise," said Nimesh Shah, MD & CEO of ICICI Prudential AMC.
"Through the journey of
ICICI Prudential Value Discovery Fund, we have endeavoured to prove that value as a style works well in India as well. We are happy to note that the Scheme over the years has helped patient investors create long-term wealth.”
“Globally as well as in the scheme, there have been patches of time when value investing has not done well. However, if an investor is ready to be patient, then value investing will deliver sizeable returns over the long term," said S Naren, ED & CIO, ICICI Prudential AMC Ltd.
"This is because the thesis of value investing is about buying stocks that have attractive valuations but are quoting at a discount to their intrinsic value,” Naren added.
He said, “Given the approach, it is advisable that investors should consider investing through the SIP route for the long term, especially during times when the past return is very good. On the other hand, when the past returns are low, we recommend investors to consider lump sum investing.”
First Published: Aug 21, 2023 3:38 PM IST
