Best value-oriented equity mutual funds to invest in 2018

The value mutual funds come with a diversified portfolio and growth-oriented stocks. They follow a constructive strategy for receiving good returns all over the market cycles. It is essential to choose the right MF to secure good returns.

The value-based funds are the best way to invest in undervalued stocks and receive potential growth and handsome returns. Through this option, the investors are in the hold of stocks till the day when the precise value of these stocks is realised in the market. You may have come across the names of Aditya Birla Sun Life Pure Value Fund or Tata P/E Fund but do you know where to invest?

Let us have a look at the best equity mutual funds for generating wealth creation to save the future.

Investing in the Best Equity Mutual Funds of 2018

The value-oriented funds have low-level of downside and they concentrate on trading stocks at a discount. They reduce the risk and assure potential growth by holding the stocks for a long period. The experts suggest having at least 10% of the portfolio on the value-based mutual funds for increasing the benefit of diversification in the portfolio.

The funds may witness under-performance but they guarantee high returns. It is widely suitable for the patient investors. Take a look at the following table for understanding the performance of the best equity mutual funds.

Mutual Funds	5-year Return	3-year Return	1-year return
Tata P/E Fund	25.4%	18.3%	11.6%
HDFC Capital Builder Value Fund	20.9%	15.2%	14.8%
L&T India Value Fund	25.5%	16.8%	6.1%
Aditya Birla Sun Life Pure Value Fund	28.5%	19.5%	11.2%

Tata P/E Fund

For the investors seeking long-term appreciation, this is one of the best mutual funds. It invests in equity-related and equity instruments of various companies only where the rolling P/E is not more than the rolling P/E of S&P BSE Sensex.

Categorised in the value fund, the open ended equity scheme offers regular and reasonable capital appreciation to an investor. There is no confirmation that the mutual fund investment objective may be achieved due to the no assurance on the returns.

The long-term record of Tata P/E Fund displays that within 10 years of return, the MF has outperformed the category. 12.72% is the average return of category but the fund has provided 15.16% of the return. Also, it has provided more than double of the benchmark return rate.

The minimum rate of mutual fund investment starts at Rs.5,000 and the expense ratio is 2.68%. There is no entry load but the exit load is 1% for the redemption in a year. This value-based equity fund is not particularly sector-biased but it still is a higher large-cap in comparison to its peers.

HDFC Capital Builder Fund

This MF is an equity-linked growth scheme which is only suitable for the long-term unit-holders. HDFC Asset Management Company has initiated the plan to boost long-term capital appreciation only by investing in equities of the blue-chip companies.

The blue-chip companies are acknowledged for their competence and integrity. They generally have surfeit cash generation and offer high profitability on the investments of mutual funds. HDFC Capital Builder Value Fund considers energy, financial and tech industries mainly. BPCL, Larsen & Toubro Ltd., ICICI Bank Ltd., Infosys Ltd., and Grasim Industries Ltd. are few of the companies that have invested.

The value of the asset under management is more than Rs.3644.53 cr. NIFTY 500 total return index is the benchmark. It is to note that the fund has surpassed the benchmark returns along with moderate category returns. The long-term track record shows the high mutual fund returns being primarily suitable for the investors with a high risk appetite.

As it is one of the efficient best equity mutual funds, the scheme has outperformed the benchmark 4%-6% in the 1-5 year(s). It has also surpassed the average rate of the category by 5%-8%. Since the beginning of the scheme, the fund has been able to provide a 15.15% return per year.

L&T India Value Fund

Launched in 2009, the fund invests in the undervalued stocks for generating long-term capital appreciation and risk-adjusted returns. The scheme analyses the financial strength, business prospects, stock valuation, competitive advantage and potential earnings at the time of choosing stocks.

Now the fund has more than Rs.7,638.71 cr asset under management and its benchmark is S&P BSE SENSEX. The top holding companies invested in the scheme are ICICI Bank Ltd., Infosys Limited and Reliance Industries Limited.

Apart from the Indian market, one of the best equity mutual funds 2018 also invests in the foreign securities of the international market. There is no entry load for the best equity mutual funds but 1% exit load is allotted within one-year of purchasing the fund.

L&T India Value Fund has outshined the category by 6%-14% and outperformed the benchmark by 6%-11% in three and five years of return. It has also provided 16.49% annualised returns since the launch. The systematic investment plan estimated Rs. 5,000 per annum in the fund initiated five years, is now worth of Rs.5.12 lakh.

Aditya Birla SL Pure Value Fund

If you are looking for one of the best equity mutual funds guaranteeing long-term capital growth, this is the one. It is an open-ended equity fund which is included in the under-value category. The minimum range of investment is Rs.1000 and the current NAV is Rs.51.572 cr.

Started in 2008, it looks forward to the business widely overlooked by the market offering high-level of safety. In this way, Aditya, Birla Sun Life Pure Value Fund secures potential growth. Nonetheless, the scheme tends to tilt towards the small-cap and mid-cap categories where the mispricing generally tends to be too accurate.  

Over the years, like other mutual funds, Pure Value Fund has enlarged the corpus leading to a diversified portfolio. It looks for new value ideas for resulting in a high portfolio churn. The consistent track record has paved the avenue for decent returns and high volatility in the market. Generally, this type of mutual funds is approached by aggressive investors.