With value investing serving as its foundation, Aditya Birla Sun Life Pure Value Fund aims to deliver long-term capital appreciation. Read this post to learn more about this scheme.

Be it our careers, personal endeavors, or relationships, we have an unwavering desire for “value” in everything we encounter to enrich our lives. So, why not use the same principle for investing?

Value investing is a strategy where you make investments in undervalued stocks or other financial instruments. As the strategy requires market expertise and experience, leveraging it through a mutual fund scheme can be a wise decision.

Aditya Birla Sun Life Pure Value Fund uses this popular investment strategy to deliver potentially long-term capital appreciation. Here’s everything you should know about this mutual fund scheme-

Fund Overview of ABSL Pure Value Fund

Launched in 2008, ABSL Pure Value Fund is an open-ended equity scheme of Aditya Birla Sun Life Mutual Fund. It uses a value investment strategy to invest predominantly in equity and equity-related instruments to potentially deliver long-term capital appreciation.

The scheme allocates a minimum of 85% to up to 100% of the portfolio to equity and equity-related instruments. It can also invest up to 15% of the net assets into fixed-income securities to meet liquidity requirements.

Investment Strategy ABSL Pure Value Fund

As Aditya Birla Sun Life Pure Value Fund uses the value investing strategy, it aims to invest in a diversified portfolio of stocks that maybe undervalued or trading at a price lower than their fundamental or intrinsic value. With time as the market starts discovering the true value of these stocks, they could potentially deliver significant returns on the investment.

These undervalued stocks are selected based on investment strategies such as low P/E (Price-to-Earnings) ratio, low P/B (Price-to-Book) ratio, etc. The scheme invests in stocks across sectors and market caps to take maximum advantage of the value investing strategy.

Benefits of Investing in Aditya Birla Sun Life Pure Value Fund

• Value investing strategy to potentially deliver long-term capital appreciation

• Invests across market caps and sectors

• Offers a readymade and professionally managed, diversified stock portfolio

• Ideal for long-term investment goals of 5 years or more

• Minimum investment of ₹1,000

Direct Plan Vs. Regular Plan

Like other mutual funds, ABSL Pure Value Fund have Regular Plan and Direct Plan. You’ll invest in the direct plan of this scheme by investing through Aditya Birla Sun Life’s official website or selected online platforms.

However, investments made through a third party, like a mutual fund distributor, are made in the regular plan. The intermediary receives a commission from your investment, due to which the returns generated by regular mutual funds are lower than direct funds.

Performance Analysis of ABSL Pure Value Fund

Here’s a quick overview of the returns generated by the ABSL Pure Value Fund-

Expense Ratio, Exit Load, and Tax

As of 15th February 2023, the expense ratio of ABSL Pure Value Fund Direct Growth Plan is 1.01%. It has an exit load of 1%, which is applicable when an investor redeems the fund units within 90 days from the date of investment.

As the scheme is a pure equity mutual fund, STCG (Short-Term Capital Gains) of 15% (+ cess and surcharge) will be applicable on investments held for less than 12 months. If the investment is held for more than 12 months, LTCG (Long-Term Capital Gains) tax of 10% without indexation (+ cess and surcharge) will be applicable on gains in excess of ₹1 lakh.

Also Read – Capital Gains Tax

Risks and Considerations

On the riskometer, ABSL Pure Value Fund falls in the “Very High” risk category. As it is a pure equity mutual fund that invests in stocks across market caps and sectors, there can be significant short-term fluctuations in the investment value based on the market conditions.

Thus, investors with a long-term investment horizon of 5 years or more can consider investing in this scheme.

How to Invest in Aditya Birla Sun Life Pure Value Fund?

Investors can invest in the ABSL Pure Value Fund Growth Plan online through AMC’s website, either in a lump sum or through SIP (Systematic Investment Plan). The minimum investment amount for lump sum and SIP is ₹1,000.

Alternatively, investors can also invest in the regular plan of this scheme through a mutual fund distributor or broker.

Value Investing Done Right with ABSL Pure Value Fund

Value investing has stood the test of time and remains an enduring investment philosophy, no matter the market fluctuations, economic challenges, or the evolving financial landscapes. With ABSL Pure Value Fund, investors can aim to benefit from this time-proven strategy and build a more secure financial future.

But as the scheme falls in the “Very High” risk category, investors should consult with their financial advisors before making a decision.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.