Top 3 Best Contra Funds to Invest in 2020

Updated on January 23, 2020 , 3805 views

Are you the kind of investor who likes taking a little adventure in investments? If yes, then you need to know about contra funds. Contra is the 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.

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What are 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.

Best Performing Contra Funds to Invest in FY 20 - 21

Fund	NAV	Net Assets (Cr)	3 MO (%)	6 MO (%)	1 YR (%)	3 YR (%)	5 YR (%)	2019 (%)
Invesco India Contra Fund Growth	₹50.83 ↑ 0.18	₹4,596	8.4	12.3	12	13.9	10.3	5.9
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 24 Jan 20

1. Invesco India Contra Fund

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 CAGR/Annualized return of 13.6% since its launch. Ranked 11 in Contra category. Return for 2019 was 5.9% , 2018 was -3.3% and 2017 was 45.6% .

Below is the key information for Invesco India Contra Fund

Invesco India Contra Fund Growth
Launch Date	11 Apr 07
NAV (24 Jan 20)	₹50.83 ↑ 0.18 (0.36 %)
Net Assets (Cr)	₹4,596 on 31 Dec 19
Category	Equity - Contra
AMC	Invesco Asset Management (India) Private Ltd
Rating	☆☆☆☆
Risk	Moderately High
Expense Ratio	2.02
Sharpe Ratio	0.24
Information Ratio	0.56
Alpha Ratio	-1.98
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
31 Dec 14	₹10,000
31 Dec 15	₹10,402
31 Dec 16	₹11,101
31 Dec 17	₹16,167
31 Dec 18	₹15,640
31 Dec 19	₹16,569

Invesco India Contra Fund SIP Returns

Total investment amount is ₹300,000
expected amount after 5 Years is ₹395,578.
Net Profit of ₹95,578 Invest Now

Returns for Invesco India Contra Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 24 Jan 20

Duration	Returns
1 Month	4.1%
3 Month	8.4%
6 Month	12.3%
1 Year	12%
3 Year	13.9%
5 Year	10.3%
10 Year
15 Year
Since launch	13.6%

Historical performance (Yearly) on absolute basis

Year	Returns
2019	5.9%
2018	-3.3%
2017	45.6%
2016	6.7%
2015	4%
2014	63%
2013	4.7%
2012	30.7%
2011	-22.1%
2010	12.9%

Fund Manager information for Invesco India Contra Fund

Name	Since	Tenure
Amit Ganatra	14 Aug 12	7.22 Yr.
Taher Badshah	10 Jan 17	2.81 Yr.

Data below for Invesco India Contra Fund as on 31 Dec 19

Equity Sector Allocation

Sector	Value
Financial Services	30.28%
Consumer Cyclical	12.35%
Technology	10.63%
Industrials	8.54%
Health Care	8.41%
Energy	7.75%
Consumer Defensive	6.26%
Utility	6.19%
Basic Materials	4.86%
Communication Services	3.13%

Asset Allocation

Asset Class	Value
Cash	1.61%
Equity	98.39%

Top Securities Holdings / Portfolio

Name	Holding	Value	Quantity
ICICI Bank Ltd (Financial Services) Equity, Since 31 May 17 \| ICICIBANK	9%	₹406 Cr	7,924,233 ↑ 16,423
HDFC Bank Ltd (Financial Services) Equity, Since 30 Apr 14 \| HDFCBANK	8%	₹385 Cr	3,018,130
Reliance Industries Ltd (Energy) Equity, Since 31 Aug 19 \| RELIANCE	6%	₹276 Cr	1,779,031 ↑ 245,368
Infosys Ltd (Technology) Equity, Since 30 Sep 13 \| INFY	5%	₹226 Cr	3,248,385
Larsen & Toubro Ltd (Industrials) Equity, Since 28 Feb 18 \| LT	4%	₹189 Cr	1,420,267
ITC Ltd (Consumer Defensive) Equity, Since 30 Jun 19 \| ITC	4%	₹186 Cr	7,540,697 ↓ -493,015
Axis Bank Ltd (Financial Services) Equity, Since 30 Sep 18 \| 532215	4%	₹161 Cr	2,180,096 ↑ 334,333
Bharti Airtel Ltd (Communication Services) Equity, Since 31 Oct 18 \| BHARTIARTL	3%	₹136 Cr	3,083,801 ↓ -324,254
Sun Pharmaceuticals Industries Ltd (Healthcare) Equity, Since 30 Nov 16 \| SUNPHARMA	3%	₹126 Cr	2,809,825 ↓ -238,162
State Bank of India (Financial Services) Equity, Since 31 May 18 \| SBIN	3%	₹123 Cr	3,583,462 ↓ -342,697

Who Should Invest in Contra Funds?

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.

How to Invest in Contra Funds Online?

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Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.