Value Funds

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Value funds focus on safety of investments rather than on growth. Value funds offer long term growth of capital.

Definition and features of the Value Funds:

Amongst the wide variety of mutual funds are available in India, value funds is a type of mutual fund wherein the main focus is on the safety of the investment and not on the growth of the investment made on such funds. Value funds represent stocks of mature companies, whose growth has become stagnant. Further, these stocks of the value funds utilize their earnings to pay off dividends to the investors.

One of the typical characteristics of the value fund is that, they generate income from the dividends and they also offer long term growth from capital appreciation. The returns on Value funds are more conservative in nature. Another important feature of the value funds is that, they invest in stocks of companies that have lesser appeal to the mainstream investors and the stocks have lost its sheen.

The value funds in India operate as per the guidelines of according to the guidelines laid down by the Association of Mutual Funds of India (AMFI) and Securities and Exchange Board of India (SEBI). The value funds offer tax exemption on value fund investments according to Chapter III of the Income Tax Act, 1961.

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Last Updated 06/30/2011

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