When it comes to financial security, many Indians prefer traditional investments like fixed deposits (FDs), gold, and real estate. However, there’s one investment option that many overlook—mutual funds, especially value funds. These funds, although not as glamorous as stocks or real estate, have shown excellent returns for those who invest with a long-term perspective.
Among the various mutual funds available, one fund that has quietly made its investors wealthy over time is the JM Value Fund. Let’s break down how this fund works, its performance, and why it should be part of your financial planning, especially for securing your child’s future.
Why You Should Consider Value Funds
Value funds like the JM Value Fund focus on investing in companies that are undervalued in the market. These are companies whose current stock prices are lower than their actual worth. While these companies may not be popular or from fast-growing industries, they often come with the potential for growth over time.
The strategy behind value investing is simple: buy stocks when their prices are low and wait for the market to recognize their true value, leading to long-term gains. Although it requires patience, this method has historically provided solid returns to investors willing to stick around for years.
JM Value Fund: A Steady Performer Since 1997
Launched in June 1997, JM Value Fund has established itself as a consistent performer in the Indian mutual fund space. It aims to grow investors’ wealth by holding a diversified portfolio of undervalued stocks. While it may not always make headlines, its long-term performance speaks volumes.
If an investor had put in just Rs 1 lakh when the fund started, that investment would have grown to an impressive Rs 87 lakh today. With an average annual return rate of 17.78%, JM Value Fund has shown steady growth, even in challenging market conditions.
In the last year alone, the fund has provided a return of 50.2%, outperforming many other funds in its category. The fund’s Compounded Annual Growth Rate (CAGR) for the last year stands at 54.29%. This means, if you had invested Rs 10,000 a year ago, you’d be sitting on Rs 15,467 today.
How Can This Help Secure Your Child’s Future?
Here’s the real takeaway: If your parents had invested just Rs 1.25 lakh in the JM Value Fund when you were born, you’d be a millionaire by now. That’s the power of compounding returns over a long period.
Now, imagine doing the same for your child. A small investment in a value fund like JM Value could ensure they have a significant financial cushion by the time they turn 30. It’s a simple way to build wealth, without the need for high-risk stock market bets or relying on traditional investments that may not keep up with inflation.
Where is JM Value Fund Investing?
One of the reasons for the consistent returns from JM Value Fund is its smart selection of stocks. As of September 2024, the fund has assets under management (AUM) of ₹1,085 crore and an expense ratio of just 0.83%, which is in line with industry standards.
The fund’s portfolio is heavily invested in equity, accounting for 99.86% of its total investment. Some of the prominent companies in its portfolio include:
- HDFC Bank
- NTPC
- Dr. Reddy’s Laboratories
- ICICI Bank
- Infosys
- SBI (State Bank of India)
- LIC Housing Finance
- Restaurant Brands Asia
These companies come from various sectors, from banking and finance to pharmaceuticals and technology. By diversifying across industries, the JM Value Fund reduces risk while maximizing growth potential.
The Power of Long-Term Investment
One of the biggest advantages of investing in mutual funds like JM Value Fund is the ability to harness the power of compounding. By staying invested for the long haul, you give your money the chance to grow exponentially. This is how a Rs 1 lakh investment can turn into Rs 87 lakh over 27 years.
Moreover, with the fund doubling its investors’ money every two years, it’s clear why value funds are becoming a popular choice for long-term financial planning.
