New Mahindra Manulife Value Fund NFO: Is it Safe to Invest?

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The newly launched Mahindra Manulife Value Fund NFO promotes the motto "value unfolds over time," as quoted by Mahindra Manulife Mutual Fund, which launched this NFO on 7th February and will close on 21st February 2025. It is an equity scheme that follows a value investment strategy thoroughly, and to quote the advocate of value investing, "price is what you pay, value is what you get."

Circling back to the topic, this analysis explores this latest NFO inside out and resolves your query of whether it is a safe investment option or not.

What is Meant by Value Investing?

In simple words, value investing is about identifying and investing in stocks that are under-priced or buying at a discounted price that is much lower than their intrinsic or face value. (Intrinsic value is the true potential value of the stock).

Looking at the above graph, you can see the reasons for a mismatch between price and intrinsic values such as over-reaction (under optimism), under-attention from markets and temporary or short-term issues that can affect the returns over time.

Fun Fact Time: Did you know who the father of value investing is? Buzzer, Benjamin Graham is the originator and known around as the "father of value investing".

4 Types of Value Investing

The following are 2 methods of value investing that every investor should know before investing in Mahindra Manulife Value Fund NFO:

1. Mechanical Investing: This strategy is based on screening stocks using key ratios like Price-To-Earnings (PE) and price stock-to-book value (PB) ratios. Here, the portfolio manager automatically buys stocks below a set PE ratio and sells them above the limit, getting you good profit-earning margins.
2. Activist Investing: It involves taking large positions in undervalued, poorly managed companies by focusing on policy or management changes to boost improvement. For Example, an activist investor buys a large stake, which leads to a push for the sale of underperforming divisions to boost financials.
3. Contrarian Investing: A contra style of investing means going against the market trends, For Example, investing in the housing market during the Great Recession when others were pulling out. The strategy relies on the belief that over time, the market will rebound and investors' sentiments will shift, leaving you making higher profits in the meantime.
4. Fundamental Investing: A value investment strategy that focuses on the business environment, management quality and competitive advantages. It considers solid moats and qualitative analysis alongside numerical methods to identify undervalued investment opportunities.

Want to learn if investing in an NFO is good or bad? Click here.

Mahindra Manulife Value Fund NFO: Basic Details

Here are the key information regarding this New Fund Offer launched by Mahindra Manulife Mutual Fund in 2025:

Which Type of Value Investing is Used by Mahindra Manulife Value Fund NFO?

The newly launched NFO of the Value Mutual Funds category will follow an active investment strategy. The Mahindra Manulife Value Fund aims to provide long-term capital growth by investing in a diversified portfolio of companies that are selected using attributes of value investing.

Being from the value funds category, this new NFO requires a longer time to realize its potential and, hence, is ideal if you have a medium to long-term investment plan.

Similarly, the identification of undervalued stocks by the latest NFO will be based on the evaluations of various factors, including but not limited to stock valuation, financial strengths, cash flows, competitive advantage, business prospects and earnings potential.

The above is an internal investment framework used for determining fair valuation stocks, which further helps in estimating valuation gaps (fair valuation Vs market price). Opportunities are identified based on the identification of catalysts that help in bridging the valuation gaps by re-rating the stocks.

Important Note: Some of the measures this new NFO can use to look at the valuation of a company to determine whether it qualifies as a value stock may include but are not limited to:

1. Present value of projected cash flows
2. Price-to-earnings ratio
3. Price-to-book ratio

Is it Good to Invest in Value Funds?

Yes, investing in Mahindra Manulife Value Fund is a good investment alternative amongst N number or Mutual Funds in India as it invests in the following value-capturing opportunities:

1. Quality Companies Trading Below Intrinsic Value:Companies with strong cases of turnaround in return on equity and cash flows driven by market share gain. This new NFO aims to trade below historical average multiples.
2. Companies in the Turnaround Phase:Strong management that can deliver growth stronger than peers and broader markets. The change in government policies or regulations provides a boost to the sector.
3. Companies with Long-term Potential:Companies that got de-rated because of weak sectoral economics are now on the verge of recovery due to tailwinds. This NFO will invest in companies that are currently underappreciated due to changes in investment narrative (due to factors such as sustainability or ESG criteria) but retain the ability to generate strong profits over time.

Who is the Fund Manager of Mahindra Manulife Value Fund NFO 2025?

It is time to meet the fund managers of Mahindra Manulife Value Fund, Mr Krishna Sanghavi & Mr Vishal Jajoo

Mr. Krishna Sanghavi has over 27 years of experience, with 14 years in the mutual fund industry. He has worked at companies like Canara Robeco, Kotak Mahindra, and Aviva Life Insurance, where he was responsible for managing equity portfolios. He holds a CMA and MMS in Finance.

Mr. Vishal Jajoo has 17 years of experience in finance. He is a Chartered Accountant and holds an MBA in Investments. You can be assured that your investments in this newly launched NFO are in capable hands under the management of this expert duo.

Who Should Invest in Mahindra Manulife Value Fund NFO 2025?

The newly launched Mahindra Manulife Value Fund NFO is best suited for a variety of investors such as:

• Investors looking to invest in a portfolio of value-oriented stocks, this new NFO by Mahindra Manulife Mutual Fund is a go-to choice.
• If you are looking to stay invested for the long term, say 5-7 years, this latest NFO is a perfect fit for 2025.
• Investors are looking to benefit from potential re-rating and earnings growth of undervalued stocks.

Key Takeaways for Risk Management by Mahindra Manulife Value Fund

Here are key points that will make the Mahindra Manulife Value Fund a safe bet for 2025:

• Risk control process to manage risks through various tools such as stock limit and sector limit.
• Plans for diversification to alleviate concentration risk while preserving return potential.
• Selection of securities that offer the best risk-reward potential within the value-investing framework.
• Bottom-up stock selection to ensure robust portfolio construction.

On that note, let’s take a look at the below picture that explains the portfolio construction of this new NFO:

It is time to sum up the analysis, which will give an amazing investment route that will ensure this new NFO remains a safer bet for you.

To Conclude Mahindra Manulife Value Fund NFO Review

In short, the in-depth Mahindra Manulife Value Fund review gave away an understanding of why it is a safer bet to invest in the new fiscal year 2025. It clearly highlighted the importance of value investing and key areas in which to find value opportunities that will help you make high returns in the long term.

All-in-all, starting an early SIP (Systematic Investment Plan) will be an outstanding way to include this value fund with your current portfolio.