ICICI Prudential Value Discovery Fund marks 19 years of value investing triumph!

Rs 10 lakh invested at inception has grown to Rs 3.1 crore over 19 years as compared to Rs 1.5 crore in Nifty 50

ICICI Prudential Value Discovery Fund, the largest value fund in India by Assets Under Management (AUM), has achieved a noteworthy milestone, marking its 19th year of successful operation. Currently, the scheme holds an impressive AUM of Rs 32,659.44 crore, representing a substantial proportion of nearly 30 percent within the overall AUM of the value category. This statistic underscores the remarkable level of investor confidence vested in the scheme by value investors. 

Data as of July 31, 2023. (Source: Value Research).

The scheme adheres to a value-oriented investment approach, focusing on creating a diversified portfolio of stocks that exhibit appealing valuations, coupled with trading at a price below their inherent value.

An initial lump-sum investment of Rs 10 lakh made during its inception on August 16, 2004, would have grown to an approximate value of Rs 3.1 crore by July 31, 2023, translating to a commendable CAGR of 20 per cent. In comparison, an equivalent investment in the Nifty 50 would have resulted in a CAGR of 15.6 per cent, leading to an approximate value of Rs 1.5 crore.

Speaking on the occasion of 19 years completion, Nimesh Shah, MD & CEO of ICICI Prudential AMC says, “The greatest of the investing gurus be it Warren Buffett, Seth Klarman, Joel Greenblatt etc. are all proponents of value investing as the way to build long term wealth. We at ICICI Prudential AMC Ltd believe value as an investment style is here to stay as investors are increasingly becoming aware of what constitutes value and why it must be followed diligently. But the caveat here is that value can test one’s patience at times. We may have to wait for a long time for value to deliver on its promise. Through the journey of ICICI Prudential Value Discovery Fund, we have endeavoured to prove that value as a style works well in India as well. We are happy to note that the Scheme over the years has helped patient investors create long-term wealth.” 

“Globally as well as in the scheme, there have been patches of time when value investing has not done well. However, if an investor is ready to be patient, then value investing will deliver sizeable returns over the long term. This is because the thesis of value investing is about buying stocks that have attractive valuations but are quoting at a discount to their intrinsic value,” says S Naren, ED & CIO, ICICI Prudential AMC Ltd.  

He further adds, “Given the approach, it is advisable that investors should consider investing through the SIP route for the long term, especially during times when the past return is very good. On the other hand, when the past returns are low, we recommend investors to consider lump sum investing.”

Given the alignment of value investing with long-term investment strategies, the systematic investment plan (SIP) emerges as a favourable route. Analysing the SIP performance, an investment of Rs 10,000 made on a monthly basis since the fund's inception, resulting in a cumulative investment of Rs 22.8 lakh, would have appreciated to Rs 1.59 crore by July 31, 2023. This signifies an impressive CAGR of 17.87 per cent. In comparison, a similar SIP in Nifty 50 Total Return Index (TRI) would have delivered a CAGR of 13.22 per cent. 

Data as on July 31, 2023.The returns are calculated by XIRR approach assuming investment of Rs 10,000 on the 1st working day of every month. XIRR helps in calculating return on investments given an initial and final value and a series of cash inflows and outflows with the correct allowance for the time impact of the transactions. Past performance may or may not be sustained in future. *Inception date is August 16, 2004. Scheme benchmark is Nifty 500 TRI. The performance of the scheme is benchmarked to the Total Return variant of the Index. The investment value shown above would have varied based on the amount of SIP, the investment period of the investors and continuity of SIP.