In accordance with the mutual fund classification system of the Association of Mutual Funds in India (AMFI), the contra fund plan invests at least 65 percent of its assets in equity securities, following a contrarian approach to investing. A fund manager selects cheaply priced, underperforming equities and industries for these funds. The manager adopts a contrarian stance toward investors who have avoided these equities or sectors, believing that they would eventually make a comeback and provide substantial returns.
Top Contra Mutual Funds: Investing Rs. 1 lakh in the top fund yielded Rs. 6.45 lakh over a ten-year period.
Because of those factors, the funds may underperform even in a bull market But the higher the risk, the higher the return. Despite these factors, contra funds have a high risk-reward ratio as they invest in firms seeking to attain their full potential in the future.
There are only three contra funds available for investors in India- Invesco India Contra, Kotak India EQ Contra, and SBI Contra Fund.
All three funds have performed well over the years.
Here are their performances/returns in one, three, five, and 10 years.
1-year contra fund performance
Kotak India EQ Contra Fund-35.50%
SBI Contra Fund- 34.94%
Invesco India Contra Fund- 34.94%
3-year contra fund performance
SBI Contra Fund- 31.02%
Kotak India EQ Contra Fund-25.54%
Invesco India Contra Fund- 22.10%
5-year contra fund performance
SBI Contra Fund– 27.62%
Kotak India EQ Contra Fund-22.59%
Invesco India Contra Fund- 21.03%
10-year contra fund performance
Invesco India Contra Fund- 20.48%
SBI Contra Fund- 19.61%
Kotak India EQ Contra Fund-18.99%
Contra fund performance since funds’ inception
SBI Contra Fund- 14.76%
Kotak India EQ Contra Fund-14.47%
Invesco India Contra Fund- 13.05%
In this write-up, we will tell you about each of the funds and what Rs 100,000 investment has given in each fund in the 10-year period.
Invesco India Contra Fund
Launched in April 2007, the fund tops the contra fund return category for 10 years with a 20.48 per cent return in the period. It has outperformed its benchmark, S&P BSE 500 Total Return Index, which has given a return of 16.14 per cent in the 10 years. The fund’s assets under management (AUM) are Rs 14,502.53 crore, while its net asset value (NAV) is Rs 130.8000 under its direct plan. Its expense ratio is 1.68 per cent against the category average of Rs 1.74 per cent. The fund has 96.52 per cent of its investments in domestic equities with 46.98 per cent of them in large caps. The fund has 72 stocks in its portfolio against the category average of 74.67. The main stocks in its portfolio are ICICI Bank, HDFC Bank, NTPC, and Infosys Ltd. A Rs 1 lakh lump sum investment in the fund has given a total of Rs 6,44,391.18 to an investor.
SBI Contra Fund
Launched on July 5, 1999, SBI Contra fund is the second-best performer in the 10-year period with a 19.61 per cent return. It has outperformed its benchmark, S&P BSE 500 Total Return Index, which has given 16.14 per cent returns in the same period. The fund has assets under management (AUM) of Rs 29,738.40 crore, while its net asset value (NAV) is worth Rs 376.8974 under its direct plan. The minimum lump sum investment in the fund is Rs 5,000, while in the SIP, it is Rs 500.
SBI Contra Fund invests a minimum of 65 per cent in stocks of companies. The fund has 3.55 per cent of its assets in cash, cash equivalents, and others. Dinesh Balachandran and Pradeep Kesavan are its fund managers. HDFC Bank, Gail (India), SBI, and Reliance India Limited are the main stocks in its portfolio.
A Rs 1 lakh lump sum investment in the fund 10 years ago has given a total of Rs 5,99,342.26.
Kotak India EQ Contra Fund
The fund at No. 3 has given 18.99 per cent returns in the 10-year time frame. It has also beaten its benchmark, NIFTY 500 Total Return Index, which has grown by 16.01 per cent in the same period. The fund’s AUM is Rs 2,982.16 crore, while its NAV stands at Rs 154.3170. The Kotak fund’s expense ratio is 1.94 per cent against the category average of 1.74 per cent. Its 96.96 per cent investments are in domestic equities, of which 55.48 per cent are in large caps. The fund has 61 stocks in its portfolio against the category average of 74.67. ICICI Bank, HDFC Bank, RIL, and Infosys are the major stocks in its portfolio. A Rs one lakh investment in the fund has given Rs 5,68,990.02 in the 10 years.
The contra fund plan, which invests at least 65% of its total assets in equity stocks, is a contrarian investing strategy according to the AMFI classification of mutual funds.
A fund manager selects cheaply priced, underperforming equities and industries for these funds.
The manager adopts a contrarian stance toward investors who have avoided these equities or sectors, believing that they would eventually make a comeback and provide substantial returns.
Selecting these equities for the counter fund always carries risk for the fund manager because they are defensive, beaten down stocks that have historically delivered negative returns.
The main risk is making incorrect calls since the fund manager’s projections about future trends may prove to be inaccurate.
Due to those elements, the Underperforming funds can occur even in a bull market.
However, the return increases with the level of risk. Contra funds, on the other hand, have a high risk-reward ratio since they invest in companies that aim to realize their full potential in the future.
Investors in India have access to just three contra funds: SBI Contra Fund, Kotak India EQ Contra, and Invesco India Contra.
Over the years, all three funds have shown strong performance.
These are their one-, three-, five-, and ten-year performances and returns.
Performance of a contra fund over a year
Kotak India EQ Contra Fund (35.50%)
34.94% for SBI Contra Fund
34.94% of the Invesco India Contra Fund
three-year performance of the contra fund
31.02% for SBI Contra Fund
EQ Contra Fund Kotak India -25.54%
22.10% in the Invesco India Contra Fund
SBI Contra fund performance over a five-year period Fund: 27.62%
EQ Kotak India Contra Fund: 22.59%
21.03% is the Invesco India Contra Fund.
Ten-year performance of contra funds
Invesco India Contra Fund: 20.48%
19.61% in SBI Contra Fund
EQ Contra Fund Kotak India – 18.99%
Contra fund performance from the beginning of the funds
SBI Contra Fund: 14.76%
EQ Kotak India Contra Fund: 14.47%
Invesco India 13.05% Contra Fund
We will describe each fund in this article, along with the returns on an investment of Rs 100,000 over a ten-year period.
Contra Fund Invesco India
Since its launch in April 2007, the fund—which had a return of 20.48 percent during that time—has led the contra fund return category for ten years. It has surpassed the S&P BSE 500 Total Return Index, its benchmark, which has returned 16.14% in the ten years. The fund’s direct plan yields a net asset value (NAV) of Rs 130.8000, while its assets under management (AUM) are at Rs 14,502.53 crore. Compared to the category average of 1.74 per cent, its expense ratio is 1.68 per cent. The fund’s holdings are made up of 46.98 percent large-cap stocks and 96.52% domestic equities. The fund’s portfolio consists of 72 equities, compared to the 74.67 category average. Its portfolio’s principal stocks include Infosys Ltd., NTPC, HDFC Bank, and ICICI Bank. An investor in the fund has received a total of Rs 6,44,391.18 on a lump sum deposit of Rs 1 lakh.
SBI Contra Fund
SBI Contra Fund was established on July 5, 1999, and is the Having a 19.61 percent return, it was the second-best performer over the 10-year period. It has surpassed the S&P BSE 500 Total Return Index, its benchmark, which has returned 16.14% during the same time period. The fund’s net asset value (NAV) under its direct plan is Rs 376.8974, whereas its assets under management (AUM) is Rs 29,738.40 crore. In the fund, the minimum lump sum investment is Rs 5,000; in the SIP, it is Rs 500.
A minimum of 65% of the funds invested by SBI Contra Fund are in company stocks. Cash and cash equivalents make up 3.55% of the fund’s total assets. Its fund managers are Pradeep Kesavan and Dinesh Balachandran. Reliance India Limited, SBI, HDFC Bank, and Gail (India)
are the portfolio’s principal stocks.
Ten years ago, a lump sum investment of Rs 1 lakh in the fund yielded a total of Rs 5,99,342.26.
EQ Contra Fund by Kotak India
The fund ranked third has returned 18.99% over the last ten years. Additionally, it has outperformed the NIFTY 500 Total Return Index, which grew by 16.01 percent during the same time period. The fund has an AUM of Rs 2,982.16 crore and a NAV of Rs 154.3170. Compared to the category average of 1.74 percent, the expense ratio of the Kotak fund is 1.94 percent. 55.48 percent of its 96.96 percent of investments are in large-cap stocks, which are domestic equities. The fund is holding 61 stocks. its portfolio in comparison to the 74.67 category average. Top stocks in its portfolio are Infosys, RIL, HDFC Bank, and ICICI Bank. In ten years, an investment of Rs one lakh in the fund has yielded returns of Rs 5,68,990.02.
Account opning link:
- Groww Account- https://app.groww.in/v3cO/kyrp1zph
- Kotak neo Account https://kotaksecurities.ref-r.com/c/i/32531/109103906
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