Growth Vs Value mutual funds

[drsambu123]

dear friends
so far the discussion is going about debt vs equity or large cap vs mid cap fund. Here I want your opinion for funds with value investing style such asICICI prudential discovery, quantum long term equity. Since india is a country with expected high growth , many of the funds have style of investing in growth stocks( except few funds as i mentioned earlier).. These growth stock funds are good for high return but increased risk for down side during bear market.None of the web site classifies the funds as growth or value funds . So investors with very long horizon and minimal downside tolerance can consider value oriented stock funds in their portfolio. Any other such type of five star rated funds?

 

[pavvu_kk]

Though I'm not aware of any such classification of MFs, value investing a far more complicated and tough methodology. It requires shrewdest fund managers. It requires sticking to principles even when the fund is in deep reds. Are you sure the funds you mentioned have such managers? I would be interested to know!

 

[yodlee99]

Check a recent article on VROL:
http://new.valueresearchonline.com/story/h2_storyview.asp?str=14812

Seems that Dhirendra kumar is convinced that ICICI Pru Discovery and Franklin India value are examples of such mutual funds that invest in value stocks.

 

[pavvu_kk]

Check a recent article on VROL:
http://new.valueresearchonline.com/story/h2_storyview.asp?str=14812

Seems that Dhirendra kumar is convinced that ICICI Pru Discovery and Franklin India value are examples of such mutual funds that invest in value stocks.

I checked top 5-6 holdings (interms of %) of ICICI Pru Discovery. There are stocks with upto 50 PE in them. Either this is not a value fund or the value story has become a growth story (which should have resulted in giving stupendous returns)

 

[alroyraj]

I checked top 5-6 holdings (interms of %) of ICICI Pru Discovery. There are stocks with upto 50 PE in them. Either this is not a value fund or the value story has become a growth story (which should have resulted in giving stupendous returns)

Value funds in India are the worst wealth destroyers. Just view the performance of such funds. Large fund houses like ICICI and HDFC run extremely poor schemes of value investing mandate.Just view close ended schemes run by these 2 like the Fusion series of ICICI Prudential .Its performance over a 3 year span is deplorable. They are the worst among all schemes over a 3 year period.

Each fund houses have some core competence. I will go on to say value investing is the core incompetence of ICICI as an investment house. Even the investment calls are by and large confined to large cap and the larger mid caps.
On the other hand Sundaram has excellent schemes and recently DSPBR has the micro cap scheme which has shown more promise in the short time span it has been functioning.

But on a macro level the problem is the poor information available on the micro cap that makes it difficult for fund managers to invest blindly in them so as an asset class it is not viable assuming it stays true to its mandate.

 

[drsambu123]

Though I'm not aware of any such classification of MFs, value investing a far more complicated and tough methodology. It requires shrewdest fund managers. It requires sticking to principles even when the fund is in deep reds. Are you sure the funds you mentioned have such managers? I would be interested to know!

The funds I have mentioned are good in terms of their presnt and past performance. i cannot say they stick 100% to value stock.. None of the fund is 100% in sticking to value investing or growth investing.. Its a mix.. if we see the main theme of the fund , we can find their investing style.
During 2008 market crash ICICI pru dis resonably contained their decline when compare with many other funds.
We will see how experts give their opinion in this forum..

 

[drsambu123]

I checked top 5-6 holdings (interms of %) of ICICI Pru Discovery. There are stocks with upto 50 PE in them. Either this is not a value fund or the value story has become a growth story (which should have resulted in giving stupendous returns) [/QUOTE
We cannot comment based on the currrent PE.they might have accumulated long back when PE of those stocks were low ???? .

 

[pavvu_kk]

We cannot comment based on the currrent PE.they might have accumulated long back when PE of those stocks were low ???? .

That is what I said in my previous post. If they have accumulated long back then the fund should have given stellar performance/returns as the PEs should have risen from <10s to 50s. But I don't think that is the case. Even if that was the reality the fund manager should have exited the high PE stocks and entered new low PE stocks. Otherwise what is the point of value investing?

If you ever get a chance read what Peter Lynch says (he is one of the best fund managers of all time). In his writings he clearly mentions that due to the performance pressures on fund managers, they never have a chance to follow value investing. Growth stocks are the only stocks that give immediate results; and in the big business of MF, immediate results are what is needed.