ITI adds value fund to its equity MF offerings
It’s been two years since ITI Mutual Fund has launched its first fund. In these two years, ITI Mutual Fund launched 11 funds, of which, five are equity funds, four are debt funds while two are hybrid funds. Recently, it has launched its value fund. Currently, there are 18 funds in the value or contra category, of which, almost 80 per cent of the funds (15 funds) have a net asset value (NAV) history of more than three years. Currently, the fund is open for subscription and will remain open up to June 8, 2021.
The fund house in a press release said that the scheme is ideal for those who are seeking long-term returns as it will follow a value investing strategy. Talking about the fund, George Heber Joseph, Chief Executive Officer (CEO) & Chief Investment Officer (CIO) of ITI Mutual Fund said, “The fund house since its inception has been offering unique investment experience to its investors. With value fund, we aim to generate long-term capital appreciation by identifying undervalued stocks, which have the potential to offer superior risk-adjusted returns in the long-term on a consistent basis.”
What’s in there for investors?
Speaking about the value category, there are funds following a similar investment strategy with that of ITI Value Fund, having a performance history of more than three years. Secondly, if any of the funds are following a value investing strategy, then never expect anything spectacular in the short term. Value investing strategy usually requires a lot of patience. By long-term, we mean an investment horizon of more than 10 years. And finally, there are return expectations and for this, we need to look at the consistency of returns.
In order to do this, we will find average three-year rolling returns of Nifty 50 Value 20 Total Returns Index (TRI) for the period between June 2009 and May 2021. The average three-year rolling returns of the period are computed as 13 per cent. This means that on an annualised basis, you can keep your return expectations from this fund close to 13 per cent. Furthermore, investors should remember that investment in value funds is more sort of tactical play rather than strategic play.