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Are you the kind of investor who likes taking a little adventure in investments? If yes, then you need to know about contra funds. They are short form of contrarian, where the idea is to invest in shares of companies that are not popular and are not in the favor of the investor at the point in time. In other words, it is defined by its against-the-wind kind of Investing style.
So, let’s know more about contra Mutual Funds.
Contra funds are a type of equity fund where the fund manager bets against the prevailing Market trends by buying assets that are either depressed or under-performing at that point in time. A contrarian is an investment strategy where the fund manager keeps a strong watch on the market to identify those underperforming stocks which have great potential to grow in the future. It requires a lot of research and analysis to choose a stock in advance that has potential to grow in the future.
The selection of the stock is done with an assumption that the asset will stabilise and come into the real value in the long run after the short-term turbulence. Investors planning to invest in contra funds should know that these funds may not perform in the short-term because of the kind of assets they invest in. Here, the idea is to buy assets at a lower cost than its fundamental value in the long term.
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To provide the investors maximum growth opportunity through equity
investments in stocks of growth oriented sectors of the economy. SBI Contra Fund is a Equity - Contra fund was launched on 6 May 05. It is a fund with Moderately High risk and has given a Below is the key information for SBI Contra Fund Returns up to 1 year are on (Erstwhile Kotak Classic Equity Fund) To generate capital appreciation from a diversified portfolio of equity and equity
related securities. However, there is no assurance that the objective of the scheme will be realized. Kotak India EQ Contra Fund is a Equity - Contra fund was launched on 27 Jul 05. It is a fund with Moderately High risk and has given a Below is the key information for Kotak India EQ Contra Fund Returns up to 1 year are on The investment objective of the Scheme is to generate capital appreciation
through investment in equity and equity related instruments. The Scheme will seek to generate capital appreciation through means of contrarian investing. Invesco India Contra Fund is a Equity - Contra fund was launched on 11 Apr 07. It is a fund with Moderately High risk and has given a Below is the key information for Invesco India Contra Fund Returns up to 1 year are on Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2022 (%) SBI Contra Fund Growth ₹222.713
↓ -1.81 ₹8,341 0.2 1.9 13.1 47.3 15.1 12.8 Kotak India EQ Contra Fund Growth ₹84.443
↓ -0.78 ₹1,441 -2.3 0.6 3.9 32.8 12.7 7.4 Invesco India Contra Fund Growth ₹74.62
↓ -0.50 ₹9,348 -4.5 -4.8 0.5 30.2 11 3.8 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 24 Mar 23 Assets >= 100 Crore
& Sorted on 3 year CAGR Returns
.
1. SBI Contra Fund
CAGR/Annualized
return of 15.7% since its launch. Ranked 48 in Contra
category. Return for 2022 was 12.8% , 2021 was 49.9% and 2020 was 30.6% . SBI Contra Fund
Growth Launch Date 6 May 05 NAV (24 Mar 23) ₹222.713 ↓ -1.81 (-0.80 %) Net Assets (Cr) ₹8,341 on 28 Feb 23 Category Equity - Contra AMC SBI Funds Management Private Limited Rating ☆☆☆ Risk Moderately High Expense Ratio 2.19 Sharpe Ratio 0.88 Information Ratio 2.07 Alpha Ratio 12.18 Min Investment 5,000 Min SIP Investment 500 Exit Load 0-1 Years (1%),1 Years and above(NIL) Growth of 10,000 investment over the years.
Date Value 28 Feb 18 ₹10,000 28 Feb 19 ₹8,614 29 Feb 20 ₹8,330 28 Feb 21 ₹12,786 28 Feb 22 ₹16,193 28 Feb 23 ₹18,953 Returns for SBI Contra Fund
absolute basis
& more than 1 year are on CAGR (Compound Annual Growth Rate)
basis. as on 24 Mar 23 Duration Returns 1 Month -1.4% 3 Month 0.2% 6 Month 1.9% 1 Year 13.1% 3 Year 47.3% 5 Year 15.1% 10 Year 15 Year Since launch 15.7% Historical performance (Yearly) on absolute basis
Year Returns 2022 12.8% 2021 49.9% 2020 30.6% 2019 -1% 2018 -14.3% 2017 40.2% 2016 2.4% 2015 -0.1% 2014 47.7% 2013 -1.7% Fund Manager information for SBI Contra Fund
Name Since Tenure Dinesh Balachandran 7 May 18 4.74 Yr. Mohit Jain 5 May 18 4.75 Yr. Data below for SBI Contra Fund as on 28 Feb 23
Equity Sector Allocation
Sector Value Financial Services 21.7% Industrials 10.2% Utility 9.94% Basic Materials 9.11% Consumer Cyclical 5.63% Energy 4.89% Consumer Defensive 4.78% Technology 4.73% Health Care 4.63% Real Estate 1.58% Communication Services 1.52% Asset Allocation
Asset Class Value Cash 20.99% Equity 79.01% Top Securities Holdings / Portfolio
Name Holding Value Quantity GAIL (India) Ltd (Utilities)
Equity, Since 28 Feb 21 | 5321554% ₹306 Cr 32,211,295
↑ 5,000,000 ICICI Bank Ltd (Financial Services)
Equity, Since 28 Feb 17 | ICICIBANK3% ₹261 Cr 3,140,345
↑ 500,000 HDFC Bank Ltd (Financial Services)
Equity, Since 31 Aug 16 | HDFCBANK3% ₹232 Cr 1,443,872 Axis Bank Ltd (Financial Services)
Equity, Since 31 May 19 | 5322153% ₹218 Cr 2,504,255 Tech Mahindra Ltd (Technology)
Equity, Since 31 Mar 22 | 5327553% ₹202 Cr 1,989,904
↑ 253,800 91 DTB 06042023
Sovereign Bonds | -2% ₹198 Cr 20,000,000
↑ 20,000,000 Housing Development Finance Corp Ltd (Financial Services)
Equity, Since 31 Aug 22 | HDFC2% ₹194 Cr 740,000
↑ 300,000 Power Grid Corp Of India Ltd (Utilities)
Equity, Since 31 Dec 22 | 5328982% ₹182 Cr 8,400,000 Infosys Ltd (Technology)
Equity, Since 28 Feb 19 | INFY2% ₹174 Cr 1,131,470 Mahindra & Mahindra Financial Services Ltd (Financial Services)
Equity, Since 31 May 22 | M&MFIN2% ₹171 Cr 7,366,713 2. Kotak India EQ Contra Fund
CAGR/Annualized
return of 12.8% since its launch. Ranked 30 in Contra
category. Return for 2022 was 7.4% , 2021 was 30.2% and 2020 was 15.2% . Kotak India EQ Contra Fund
Growth Launch Date 27 Jul 05 NAV (24 Mar 23) ₹84.443 ↓ -0.78 (-0.91 %) Net Assets (Cr) ₹1,441 on 28 Feb 23 Category Equity - Contra AMC Kotak Mahindra Asset Management Co Ltd Rating ☆☆☆ Risk Moderately High Expense Ratio 2.13 Sharpe Ratio 0.22 Information Ratio 0.02 Alpha Ratio 4.61 Min Investment 5,000 Min SIP Investment 1,000 Exit Load 0-1 Years (1%),1 Years and above(NIL) Growth of 10,000 investment over the years.
Date Value 28 Feb 18 ₹10,000 28 Feb 19 ₹10,283 29 Feb 20 ₹10,979 28 Feb 21 ₹14,396 28 Feb 22 ₹16,577 28 Feb 23 ₹17,874 Returns for Kotak India EQ Contra Fund
absolute basis
& more than 1 year are on CAGR (Compound Annual Growth Rate)
basis. as on 24 Mar 23 Duration Returns 1 Month -2.4% 3 Month -2.3% 6 Month 0.6% 1 Year 3.9% 3 Year 32.8% 5 Year 12.7% 10 Year 15 Year Since launch 12.8% Historical performance (Yearly) on absolute basis
Year Returns 2022 7.4% 2021 30.2% 2020 15.2% 2019 10% 2018 2.6% 2017 35.4% 2016 7.1% 2015 -3.4% 2014 39.3% 2013 7.4% Fund Manager information for Kotak India EQ Contra Fund
Name Since Tenure Shibani Kurian 9 May 19 3.74 Yr. Data below for Kotak India EQ Contra Fund as on 28 Feb 23
Equity Sector Allocation
Sector Value Financial Services 28.94% Industrials 13.26% Consumer Cyclical 12.06% Technology 10.35% Consumer Defensive 8.26% Basic Materials 7.95% Health Care 6.4% Energy 3.78% Utility 3.13% Communication Services 2.97% Real Estate 1.15% Asset Allocation
Asset Class Value Cash 1.75% Equity 98.25% Top Securities Holdings / Portfolio
Name Holding Value Quantity Infosys Ltd (Technology)
Equity, Since 31 Oct 10 | INFY5% ₹76 Cr 498,500
↑ 49,000 ICICI Bank Ltd (Financial Services)
Equity, Since 30 Apr 18 | ICICIBANK5% ₹68 Cr 815,551
↓ -69,000 HDFC Bank Ltd (Financial Services)
Equity, Since 30 Sep 10 | HDFCBANK4% ₹65 Cr 403,336
↑ 10,000 Reliance Industries Ltd (Energy)
Equity, Since 30 Sep 08 | RELIANCE4% ₹52 Cr 218,824 State Bank of India (Financial Services)
Equity, Since 31 Oct 16 | SBIN4% ₹51 Cr 923,000 Larsen & Toubro Ltd (Industrials)
Equity, Since 28 Feb 18 | LT3% ₹49 Cr 231,695 Axis Bank Ltd (Financial Services)
Equity, Since 30 Nov 18 | 5322153% ₹48 Cr 549,000 Bharti Airtel Ltd (Communication Services)
Equity, Since 31 Oct 17 | BHARTIARTL3% ₹39 Cr 502,149 UltraTech Cement Ltd (Basic Materials)
Equity, Since 30 Jun 19 | ULTRACEMCO3% ₹37 Cr 51,800 Cummins India Ltd (Industrials)
Equity, Since 31 May 21 | 5004802% ₹36 Cr 249,000 3. Invesco India Contra Fund
CAGR/Annualized
return of 13.4% since its launch. Ranked 11 in Contra
category. Return for 2022 was 3.8% , 2021 was 29.6% and 2020 was 21.2% . Invesco India Contra Fund
Growth Launch Date 11 Apr 07 NAV (24 Mar 23) ₹74.62 ↓ -0.50 (-0.67 %) Net Assets (Cr) ₹9,348 on 28 Feb 23 Category Equity - Contra AMC Invesco Asset Management (India) Private Ltd Rating ☆☆☆☆ Risk Moderately High Expense Ratio 1.85 Sharpe Ratio 0.03 Information Ratio -0.39 Alpha Ratio 1.47 Min Investment 5,000 Min SIP Investment 500 Exit Load 0-1 Years (1%),1 Years and above(NIL) Growth of 10,000 investment over the years.
Date Value 28 Feb 18 ₹10,000 28 Feb 19 ₹9,628 29 Feb 20 ₹10,415 28 Feb 21 ₹13,624 28 Feb 22 ₹15,715 28 Feb 23 ₹16,483 Returns for Invesco India Contra Fund
absolute basis
& more than 1 year are on CAGR (Compound Annual Growth Rate)
basis. as on 24 Mar 23 Duration Returns 1 Month -3.3% 3 Month -4.5% 6 Month -4.8% 1 Year 0.5% 3 Year 30.2% 5 Year 11% 10 Year 15 Year Since launch 13.4% Historical performance (Yearly) on absolute basis
Year Returns 2022 3.8% 2021 29.6% 2020 21.2% 2019 5.9% 2018 -3.3% 2017 45.6% 2016 6.7% 2015 4% 2014 63% 2013 4.7% Fund Manager information for Invesco India Contra Fund
Name Since Tenure Taher Badshah 10 Jan 17 6.06 Yr. Dhimant Kothari 19 May 20 2.71 Yr. Data below for Invesco India Contra Fund as on 28 Feb 23
Equity Sector Allocation
Sector Value Financial Services 31.18% Industrials 13.18% Consumer Cyclical 11.37% Technology 10.62% Health Care 7.45% Consumer Defensive 6.47% Energy 5.36% Basic Materials 5.02% Utility 3.21% Communication Services 1.38% Real Estate 1.15% Asset Allocation
Asset Class Value Cash 3.63% Equity 96.37% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Ltd (Financial Services)
Equity, Since 30 Apr 14 | HDFCBANK9% ₹872 Cr 5,440,416 ICICI Bank Ltd (Financial Services)
Equity, Since 31 May 17 | ICICIBANK6% ₹568 Cr 6,828,008 Infosys Ltd (Technology)
Equity, Since 30 Sep 13 | INFY6% ₹549 Cr 3,578,567
↑ 55,221 Reliance Industries Ltd (Energy)
Equity, Since 31 Aug 19 | RELIANCE5% ₹437 Cr 1,857,061
↓ -320,255 Axis Bank Ltd (Financial Services)
Equity, Since 30 Jun 20 | 5322154% ₹366 Cr 4,198,734
↑ 464,627 Sun Pharmaceuticals Industries Ltd (Healthcare)
Equity, Since 30 Nov 16 | SUNPHARMA3% ₹308 Cr 2,981,099 Larsen & Toubro Ltd (Industrials)
Equity, Since 30 Sep 20 | LT3% ₹307 Cr 1,443,164 NTPC Ltd (Utilities)
Equity, Since 31 Mar 21 | 5325553% ₹288 Cr 16,818,783 Hindustan Unilever Ltd (Consumer Defensive)
Equity, Since 31 Jan 22 | HINDUNILVR3% ₹243 Cr 944,092
↑ 33,332 State Bank of India (Financial Services)
Equity, Since 28 Feb 21 | SBIN3% ₹242 Cr 4,376,857
↓ -2,141,715
Ideally, investors who want to diversify their Portfolio should look at this fund. Contra funds can be invested for a diversification opportunity. Investors should always remember that these funds may not perform in the short term, therefore, one who can invest for a longer duration, ideally for more than five years, should only invest in this fund.
Furthermore, contra funds are usually riskier than large-cap Equity Funds, so analyse your risk appetite before investing. You must be able to bear high-risk in this fund as sometimes the fund manager’s Call can go completely awry.
As they are a class of equity mutual funds, they are essentially taxed like any other equity fund. Short-term Capital gains (units realised within a year) are taxed at a rate of 15% irrespective of investors’ income tax slab rate. Long-term Capital Gains of up to Rs 1 lakh a year are made tax-free (units realised after one year of holding). Any gains exceeding this are taxed at 15%. There is no benefit of indexation provided.
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I got fairly clear idea about the investment philosophy of the contra fund also the high risk involved as well as unlikely good returns in short or medium duration