Value investors buy such stocks and wait for the market to discover these stocks. When the discovery happens, the stock prices will go up, and value investors make money. It may sound simple. But it is not very easy to execute. The market may take very long to discover these stocks and it may test your patience. The discovery may not happen at all. That is why value mutual funds are recommended to only sophisticated investors.
A value investor tries to choose stocks that are available at cheaper valuations. These investors employ various ratios and methodology to identify such stocks. Essentially, they look for stocks that are available at a discount to their real or intrinsic value.
We considered equity categories such as large cap, mid cap, small cap, large & mid cap, focused fund, ELSS, value & contra fund categories with schemes. We considered the schemes that have more than Rs 100 crore AUM. We did not consider flexi cap schemes as they have been introduced just three years before. We also did not consider the multi cap category as the data of the benchmark was not available for comparison.