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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 (%) 2023 (%) SBI Contra Fund Growth ₹344.557
↑ 0.08 ₹26,777 5.3 22.2 44.5 29.1 27 38.2 Kotak India EQ Contra Fund Growth ₹132.676
↑ 1.24 ₹2,672 5 26.4 47.6 24.1 21.2 35 Invesco India Contra Fund Growth ₹113.23
↑ 1.00 ₹13,903 6.2 22.9 41.8 20.8 19.9 28.8 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 13 May 24 Assets >= 100 Crore
& Sorted on 3 year CAGR Returns
.
1. SBI Contra Fund
CAGR/Annualized
return of 17.4% since its launch. Ranked 48 in Contra
category. Return for 2023 was 38.2% , 2022 was 12.8% and 2021 was 49.9% . SBI Contra Fund
Growth Launch Date 6 May 05 NAV (13 May 24) ₹344.557 ↑ 0.08 (0.02 %) Net Assets (Cr) ₹26,777 on 31 Mar 24 Category Equity - Contra AMC SBI Funds Management Private Limited Rating ☆☆☆ Risk Moderately High Expense Ratio 1.92 Sharpe Ratio 3.06 Information Ratio 1.84 Alpha Ratio 5.7 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 30 Apr 19 ₹10,000 30 Apr 20 ₹7,663 30 Apr 21 ₹13,868 30 Apr 22 ₹18,423 30 Apr 23 ₹21,160 30 Apr 24 ₹31,690 Returns for SBI Contra Fund
absolute basis
& more than 1 year are on CAGR (Compound Annual Growth Rate)
basis. as on 13 May 24 Duration Returns 1 Month -1% 3 Month 5.3% 6 Month 22.2% 1 Year 44.5% 3 Year 29.1% 5 Year 27% 10 Year 15 Year Since launch 17.4% Historical performance (Yearly) on absolute basis
Year Returns 2023 38.2% 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% Fund Manager information for SBI Contra Fund
Name Since Tenure Dinesh Balachandran 7 May 18 5.91 Yr. Mohit Jain 5 May 18 5.91 Yr. Data below for SBI Contra Fund as on 31 Mar 24
Equity Sector Allocation
Sector Value Financial Services 19.79% Basic Materials 10.25% Industrials 9.74% Consumer Cyclical 9.6% Health Care 8.09% Utility 7.67% Technology 6.77% Energy 6.52% Consumer Defensive 1.99% Communication Services 1.58% Real Estate 0.62% Asset Allocation
Asset Class Value Cash 16.43% Equity 82.64% Debt 0.93% Top Securities Holdings / Portfolio
Name Holding Value Quantity State Bank of India (Financial Services)
Equity, Since 31 Dec 10 | SBIN3% ₹771 Cr 10,254,269 HDFC Bank Ltd (Financial Services)
Equity, Since 31 Aug 16 | HDFCBANK3% ₹760 Cr 5,247,072 GAIL (India) Ltd (Utilities)
Equity, Since 28 Feb 21 | 5321553% ₹745 Cr 41,173,788 Cognizant Technology Solutions Corp Class A (Technology)
Equity, Since 28 Feb 23 | CTSH2% ₹605 Cr 990,530 ICICI Bank Ltd (Financial Services)
Equity, Since 28 Feb 17 | ICICIBANK2% ₹577 Cr 5,281,550 Torrent Power Ltd (Utilities)
Equity, Since 31 Oct 21 | 5327792% ₹522 Cr 3,841,277 Tata Steel Ltd (Basic Materials)
Equity, Since 31 Jul 22 | TATASTEEL2% ₹520 Cr 33,345,525 Axis Bank Ltd (Financial Services)
Equity, Since 31 May 19 | 5322152% ₹514 Cr 4,904,255 91 DTB 02052024
Sovereign Bonds | -2% ₹497 Cr 50,000,000 Whirlpool of India Ltd (Consumer Cyclical)
Equity, Since 29 Feb 24 | 5002382% ₹493 Cr 4,040,000 2. Kotak India EQ Contra Fund
CAGR/Annualized
return of 14.7% since its launch. Ranked 30 in Contra
category. Return for 2023 was 35% , 2022 was 7.4% and 2021 was 30.2% . Kotak India EQ Contra Fund
Growth Launch Date 27 Jul 05 NAV (14 May 24) ₹132.676 ↑ 1.24 (0.94 %) Net Assets (Cr) ₹2,672 on 31 Mar 24 Category Equity - Contra AMC Kotak Mahindra Asset Management Co Ltd Rating ☆☆☆ Risk Moderately High Expense Ratio 2.03 Sharpe Ratio 2.95 Information Ratio 0.89 Alpha Ratio 4.77 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 30 Apr 19 ₹10,000 30 Apr 20 ₹8,417 30 Apr 21 ₹13,002 30 Apr 22 ₹15,405 30 Apr 23 ₹16,731 30 Apr 24 ₹25,213 Returns for Kotak India EQ Contra Fund
absolute basis
& more than 1 year are on CAGR (Compound Annual Growth Rate)
basis. as on 13 May 24 Duration Returns 1 Month 1.2% 3 Month 5% 6 Month 26.4% 1 Year 47.6% 3 Year 24.1% 5 Year 21.2% 10 Year 15 Year Since launch 14.7% Historical performance (Yearly) on absolute basis
Year Returns 2023 35% 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% Fund Manager information for Kotak India EQ Contra Fund
Name Since Tenure Shibani Kurian 9 May 19 4.9 Yr. Data below for Kotak India EQ Contra Fund as on 31 Mar 24
Equity Sector Allocation
Sector Value Financial Services 26.35% Industrials 12.8% Consumer Cyclical 10.04% Technology 9.02% Health Care 8.49% Energy 7.77% Consumer Defensive 7.03% Basic Materials 4.91% Utility 4.86% Communication Services 4.32% Real Estate 1.4% Asset Allocation
Asset Class Value Cash 3.03% Equity 96.97% Top Securities Holdings / Portfolio
Name Holding Value Quantity ICICI Bank Ltd (Financial Services)
Equity, Since 30 Apr 18 | ICICIBANK5% ₹138 Cr 1,259,051
↑ 203,000 HDFC Bank Ltd (Financial Services)
Equity, Since 30 Sep 10 | HDFCBANK4% ₹120 Cr 829,432 Reliance Industries Ltd (Energy)
Equity, Since 30 Sep 08 | RELIANCE4% ₹103 Cr 347,824 Infosys Ltd (Technology)
Equity, Since 31 Oct 10 | INFY3% ₹92 Cr 613,300
↑ 25,000 NTPC Ltd (Utilities)
Equity, Since 30 Nov 20 | 5325553% ₹71 Cr 2,103,000
↓ -160,000 Hero MotoCorp Ltd (Consumer Cyclical)
Equity, Since 31 Oct 22 | HEROMOTOCO3% ₹68 Cr 144,700 Sun Pharmaceuticals Industries Ltd (Healthcare)
Equity, Since 28 Feb 21 | SUNPHARMA2% ₹64 Cr 394,000 Bharti Airtel Ltd (Communication Services)
Equity, Since 31 Oct 17 | BHARTIARTL2% ₹59 Cr 482,149 GAIL (India) Ltd (Utilities)
Equity, Since 28 Feb 23 | 5321552% ₹59 Cr 3,265,000 Power Finance Corp Ltd (Financial Services)
Equity, Since 30 Nov 22 | 5328102% ₹59 Cr 1,512,500 3. Invesco India Contra Fund
CAGR/Annualized
return of 15.3% since its launch. Ranked 11 in Contra
category. Return for 2023 was 28.8% , 2022 was 3.8% and 2021 was 29.6% . Invesco India Contra Fund
Growth Launch Date 11 Apr 07 NAV (14 May 24) ₹113.23 ↑ 1.00 (0.89 %) Net Assets (Cr) ₹13,903 on 31 Mar 24 Category Equity - Contra AMC Invesco Asset Management (India) Private Ltd Rating ☆☆☆☆ Risk Moderately High Expense Ratio 1.8 Sharpe Ratio 2.77 Information Ratio 0.17 Alpha Ratio 2.61 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 30 Apr 19 ₹10,000 30 Apr 20 ₹8,759 30 Apr 21 ₹13,186 30 Apr 22 ₹15,509 30 Apr 23 ₹16,399 30 Apr 24 ₹23,977 Returns for Invesco India Contra Fund
absolute basis
& more than 1 year are on CAGR (Compound Annual Growth Rate)
basis. as on 13 May 24 Duration Returns 1 Month 0.5% 3 Month 6.2% 6 Month 22.9% 1 Year 41.8% 3 Year 20.8% 5 Year 19.9% 10 Year 15 Year Since launch 15.3% Historical performance (Yearly) on absolute basis
Year Returns 2023 28.8% 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% Fund Manager information for Invesco India Contra Fund
Name Since Tenure Amit Ganatra 1 Dec 23 0.33 Yr. Taher Badshah 13 Jan 17 7.22 Yr. Data below for Invesco India Contra Fund as on 31 Mar 24
Equity Sector Allocation
Sector Value Financial Services 28.48% Industrials 15.89% Consumer Cyclical 14.04% Health Care 9.94% Technology 9.02% Utility 8.61% Basic Materials 3.71% Energy 2.51% Consumer Defensive 2.01% Communication Services 1.55% Real Estate 0.78% Asset Allocation
Asset Class Value Cash 3.44% Equity 96.55% Other 0% Top Securities Holdings / Portfolio
Name Holding Value Quantity ICICI Bank Ltd (Financial Services)
Equity, Since 31 May 17 | ICICIBANK6% ₹873 Cr 7,986,079 HDFC Bank Ltd (Financial Services)
Equity, Since 30 Apr 14 | HDFCBANK5% ₹740 Cr 5,114,242 NTPC Ltd (Utilities)
Equity, Since 31 Mar 21 | 5325555% ₹697 Cr 20,752,875 Infosys Ltd (Technology)
Equity, Since 30 Sep 13 | INFY5% ₹630 Cr 4,205,397 Bharat Electronics Ltd (Industrials)
Equity, Since 31 Dec 18 | BEL3% ₹469 Cr 23,286,988
↑ 5,291,242 State Bank of India (Financial Services)
Equity, Since 28 Feb 21 | SBIN3% ₹397 Cr 5,275,516 Zomato Ltd (Consumer Cyclical)
Equity, Since 30 Jun 23 | 5433203% ₹372 Cr 20,450,701
↑ 3,098,968 Sun Pharmaceuticals Industries Ltd (Healthcare)
Equity, Since 30 Nov 16 | SUNPHARMA3% ₹355 Cr 2,191,359 Mahindra & Mahindra Ltd (Consumer Cyclical)
Equity, Since 31 Oct 21 | M&M3% ₹349 Cr 1,816,402
↑ 494,132 Axis Bank Ltd (Financial Services)
Equity, Since 30 Jun 20 | 5322152% ₹328 Cr 3,136,159
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