As the largest value fund in India by Closing Assets Under Management (AUM), the ICICI Prudential Value Discovery Fund has successfully completed 20 years of wealth creation and investor trust. This fund has become a beacon of value investing in the Indian market, and its journey over the past two decades stands as a testament to the power of patience and conviction in investing.
Since its inception on August 16, 2004, the ICICI Prudential Value Discovery Fund has grown exponentially. An initial lump sum investment of Rs 10 lakh in the fund has now swelled to approximately Rs 4.56 crore as of July 31, 2024. This impressive growth, reflecting a compound annual growth rate (CAGR) of 21.09%, is a significant contrast to the Rs 2 crore that the same investment would have generated in the Nifty 50, which had a CAGR of 16.2%.
The fund’s ability to outperform the market and deliver superior returns over the long term is a key reason behind its AUM of Rs 48,805.97 crores, which accounts for nearly 25.9% of the total AUM in the value category. This achievement underscores the significant trust placed in the fund by value investors who believe in its strategy of investing in undervalued stocks that have the potential for substantial future growth.
Speaking on this momentous occasion, Nimesh Shah, MD & CEO of ICICI Prudential AMC Ltd, emphasized the importance of patience in value investing. “It’s important to recognize that value investing requires patience as it can take time for the full benefits to materialize. The journey of the ICICI Prudential Value Discovery Fund has demonstrated that the value investing approach is effective in the Indian market as well,” Shah remarked.
S Naren, Executive Director & Chief Investment Officer of ICICI Prudential AMC Ltd, reflected on the initial skepticism surrounding the fund. “When ICICI Prudential Mutual Fund launched its Value Discovery Fund in 2004, there were doubts about whether value investing could thrive in a growth market like India. However, our conviction was rooted in the belief that value investing, which had proven successful in other growth economies like the USA, would find its place here as well,” he said.
The fund’s journey has not been without challenges. There were phases of underperformance, particularly between May 2006 to February 2009, and again from 2016 to 2018. However, these periods have only reinforced the strength and resilience of value investing. Despite these challenges, the long-term results have underscored the enduring potential of this investment style.
Naren adds, “Over the past two decades, the performance of ICICI Prudential Value Discovery Fund has demonstrated that value investing can indeed work in a growth market like India. While there have been phases of underperformance, the long-term prospects of Value Investing remain strong.”
For investors seeking a systematic approach to wealth creation, the ICICI Prudential Value Discovery Fund has proven to be a compelling option. A monthly SIP (Systematic Investment Plan) of ₹10,000 since the fund’s inception would have grown to ₹2.30 crore by July 31, 2024, representing a CAGR of 19.41%. This performance outshines a similar investment in the Nifty 50 TRI, which would have yielded a CAGR of 14.21%.
The fund’s ability to deliver strong returns through SIP further emphasizes the advantages of value investing over the long term. This systematic approach allows investors to benefit from the fund’s disciplined investment strategy, even during periods of market volatility.
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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
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