Product crack | Fidelity Value Fund

Product crack | Fidelity Value Fund

Name of the new fund offer (NFO)

Fidelity Value Fund (FVF)

What is this?

What works?

Fidelity’s decent equity track record and its penchant for focusing more on existing schemes and less on new schemes are some of its strengths. Further, a “value" fund makes sense in markets that are heated or considered to be fairly valued. If you feel that the present markets are bubbly, it’s a good time to partially invest in value funds. Due to a “value" scrip’s inherent low valuation, they fall less hard than high-growth scrips in a falling market.

What doesn’t?

Apart from the lack of performance history, there’s nothing much on the face of it that works against the fund. Also, the idea is not new and there are enough choices in the space.

Money Matters Take

If you feel that the present equity markets are over-heated, a well-managed “value" fund is a good option. Typically, “value" funds outperform growth funds in falling markets as they invest in stable and less volatile firms. In a rising market, the market focuses on growth stocks. FVF is the first value fund from the Fidelity’s stable as the mutual fund aims to strengthen its product suite. While that is a good enough reason for the fund house to launch a new scheme, we would suggest you put it on hold for now. Templeton India Growth Fund, India’s first “value" fund, has had a good and consistent track record, especially in falling markets, and also comes with good pedigree. With the original master with a proven track record around, you shouldn’t pick up FVF just yet. But we suggest you do keep an eye on FVF, too.

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