Most value funds are performing badly: Is it time to dump them?

One reason why most categories of active funds, and not just value funds, have fared poorly has been the concentrated nature of market performance

Value funds have given a category average return of minus 11.53 per cent over the past year. Only the mid-cap and the small-cap categories have fared worse. When investors put their money in value funds, they expect them to protect their portfolios against the downside risk in declining markets, which many have clearly failed to do so.  

One reason why value funds have done poorly is that the Securities and Exchange Board of India’s (Sebi’s) recategorisation circular only says that the fund should follow a value investment strategy, with a minimum 65 per cent in equity and equity-related instruments. It