In recent years, L&T India Value Fund has maintained its position as one of the top mutual funds in the market. The reason for its steady popularity is the higher returns. The scheme operates to generate wealth by providing capital appreciation in the long term.
This L&T mutual fund has shown excellent performance over the year. However, there are many other mutual funds in the market which provide similar features. Therefore, before deciding to invest in mutual funds or giving a verdict on their ability to provide reasonable returns, it is important to analyse all the influencing factors.
What is L&T India Value Fund?
L&T India Value Fund is an open-ended scheme, which follows the value investment approach. This L&T Mutual Fund was launched in January 2010. The value investing approach focuses on undervalued securities. Therefore, the L&T India Value Fund will identify the values of the various businesses and their traded stock price. If the traded stock price is higher than the true worth of business that means, the business is overvalued. Contrarily, businesses with lower traded stock price than the true worth of business are considered undervalued. The capital under the L&T India Value Fund is invested in the undervalued businesses with the potential to provide a long-term return with an adjusted risk. The fund managers generally monitor this process of filtration. The capital under this scheme can be invested in foreign securities in the global market.
In the case of the L&T India Value Direct Plan, the investors purchase units directly from the fund. On the other hand, the L&T India Value Regular Plan requires the investors to purchase units through an ARN holder. Investors can choose between the two variables under this scheme, i.e. Growth and Dividend. No exit fees are charged for this scheme. In case of redemption or switching out within one year of allotment or purchase, a 1% exit load is charged. However, this exit charge doesn’t apply if recovery or switching out is made after one year of allotment or purchase.
What are the advantages of L&T India Value Fund
The advantages of investing in L&T India Value Fund are mentioned below.
- Higher returns: This fund allows its investors to gain higher returns by investing the capitals in the undervalued securities. The 1-year returns under this scheme are higher than the benchmark.
- Diversified portfolio: The portfolio of L&T India Value Fund is well diversified. It allows investors to invest in a variety of value stocks. The diverse portfolio helps in reducing the volatility caused by the small and mid-caps. The fund verifies the growth-potential of every business before investing.
What are the disadvantages of L&T India Fund Value?
Along with the advantages of L&T India Fund Value, comes a set of disadvantages, which are mentioned below:
- Recent return rates: The 3-years and 5-years return rate provided under the fund is generally higher and the L&T India Value Fund growth has been decent. But in recent years, the rate has declined. Therefore, the latest changes in returns have added to the disadvantage.
- Risk Level: The various mutual funds such as the L&T mutual fund emerging business fund, L&T Equity fund, L&T Business Cycle fund and so on have their risk factors. L&T India Value Fund is no exception. The risk factor under this scheme is moderately high. Moreover, this scheme earns more capital when invested in 3 or 5 years of tenure. Small-term investment may not be able to make good returns.
Is L&T India Value Fund Suitable For You?
The risk factor under this scheme is high; therefore, investors with an appetite for risk are most suitable. Moreover, investors with long-term goals will find this scheme ideal, since this scheme provides a higher return from long-term investments. You can invest in a lump sum or SIP investments, as per your convenience. Therefore, if you are willing to keep investing for a long time and want higher returns, you should opt for this scheme. Investors with proper knowledge of the macro trends and ready to take calculated risks are suitable for L&T India Value Fund as well.
Does the L&T India Value Fund Provide Good Returns?
As per the performance record over the years, it is safe to say that L&T India Value Fund generates higher returns. The Net Asset Value of the scheme as on 17th January 2020 is Rs 37.539. The Asset Under Management as of 2019 is Rs 7759.49 crores.
| Period | Annualised Return |
| 10 years | 14.01% |
| 5 years | 9.92% |
| 3 years | 8.66% |
| 2 years | -2.97% |
| 1 year | 9.25% |
| 6 month | 4.82% |
Table 1: Return rates over the years
With the exception of investments made two years ago, the return rates under the L&T India Value Fund are good. Thus, it is a good option for investors willing to get higher returns.
If or after you decide to invest in this scheme, you will have to know how to invest in L&T mutual funds. To become an investor under this scheme, you will have to go through the process of registration. You can complete the registration and start investing in L&T mutual funds online. Before making any decision, make sure to understand all the terms and conditions properly.
