Value funds are a type of investment fund that focuses on buying stocks that are considered undervalued compared to their intrinsic worth. These funds aim to identify companies whose stock prices are lower than their true value, often due to temporary issues or market overreactions. Investors believe that these stocks will eventually rise in price, providing potential for significant returns. Typically managed by professional fund managers, value funds may invest in various sectors and industries. They often look for companies with strong fundamentals, such as solid earnings and low price-to-earnings ratios. This strategy contrasts with growth funds, which focus on companies expected to grow at an above-average rate.