Top Performing Contra Funds in 10 Years

The below table shows a list Of the Best Contra Mutual Funds Based on AUM, NAV and minimum SIP.

Introduction to Top Performing Contra Funds in 10 Years

SBI Contra Fund

SBI Contra Direct Plan-Growth is a Contra mutual fund scheme from SBI Mutual Fund. This fund has existed for 11 years and 8 months, having been launched on 01/01/2013.

SBI Contra Direct Plan-Growth as a Contra Mutual fund, manages assets valued at ₹34,366.43 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 33.76%. This fund has an exit load of 1% and an expense ratio of 0.59%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity at  89.64%, Debt at 5.76% and Other at 4.59%.

Invesco India Contra Fund

Invesco India Contra Fund Direct-Growth is a Contra mutual fund scheme from Invesco Mutual Fund. This fund has existed for 11 years and 8 months, having been launched on 01/01/2013.

Invesco India Contra Fund Direct-Growth as a Contra Mutual fund, manages assets valued at ₹17,268.79 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 26.55%. This fund has an exit load of 1% and an expense ratio of 0.51%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity at  99.15%, No Debt and Other at 0.85%.

Kotak India EQ Contra Fund

Kotak India EQ Contra Fund Direct-Growth is a Contra mutual fund scheme from Kotak Mahindra Mutual Fund. This fund has existed for 11 years and 8 months, having been launched on 01/01/2013.

Kotak India EQ Contra Fund Direct-Growth as a Contra Mutual fund, manages assets valued at ₹3,499.74 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 26.11%. This fund has an exit load of 1% and an expense ratio of 0.56%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity at  98.35%, No Debt and Other at 1.65%.

What Are Contra Funds?

Contra funds are a type of mutual fund where the fund manager invests in stocks that are currently out of favour or undervalued in the market. The strategy is to buy low and hold until the market recognizes their potential.

These funds operate on a contrarian investment philosophy, meaning they go against prevailing market trends. Fund managers identify companies with strong fundamentals but underperforming stock prices due to temporary market conditions, expecting future price corrections.

Investing in contra funds requires patience, as it may take time for the market to realize the value of these undervalued stocks. The goal is to achieve long-term capital appreciation.

Features Of Top Performing Contra Funds in 10 Years

The main features of top-performing contra funds over the last 10 years include consistent long-term returns, a contrarian investment approach, careful stock selection and resilience during market downturns, making them attractive for investors seeking steady growth with lower risk.

• Consistent Long-term Returns: Top contra funds have shown stable returns over the long term by investing in undervalued stocks. This strategy capitalizes on future growth, with funds often outperforming during market recoveries, delivering solid returns to patient investors.
• Contrarian Investment Approach: These funds adopt a contrarian philosophy, buying stocks that are overlooked or undervalued by the market. Fund managers seek opportunities in sectors and companies that others avoid, leading to potentially higher returns when market trends shift.
• Careful Stock Selection: Fund managers prioritize companies with strong fundamentals, focusing on sound balance sheets and growth potential. They aim to invest in businesses likely to bounce back, ensuring that the portfolio is filled with high-quality assets that are temporarily undervalued.
• Resilience in Market Downturns: Due to their focus on undervalued stocks, contra funds tend to be more resilient during market declines. These funds are less impacted by market volatility, providing a safety net for investors when overall stock markets experience corrections or downturns.

Best Performing Contra Funds in 10 Years

The table below shows the Best-performing Contra Mutual Funds Based on the highest to lowest expense ratio.

Top Performing Contra Funds in 10 Years In India

The table below shows the Best Contra Mutual Funds Based on the Highest 3Y CAGR.

Top Performing Contra Funds in 10 Years List

The table below shows Best Performing Contra Mutual Funds In India Based on Exit Load, i.e., the fee that the AMC charges investors when they exit or redeem their fund units.

Factors To Consider When Investing In Top Performing Contra Funds in 10 Years

The main factors to consider when investing in top-performing contra funds over the last 10 years include the fund manager’s expertise, historical performance, expense ratio and risk tolerance. These factors help investors make informed decisions and maximize potential returns.

• Fund Manager Expertise: The success of a contra fund largely depends on the manager’s ability to identify undervalued stocks. A manager with a proven track record in contrarian investing and market insight can significantly enhance the fund’s performance over time.

• Historical Performance: Analyzing the historical performance of a contra fund is crucial. Reviewing how the fund performed in different market cycles, especially during downturns, ensures it consistently delivers strong long-term returns under various conditions.

• Expense Ratio: The expense ratio represents the cost of managing the fund. A lower expense ratio means fewer management fees are deducted from the fund’s returns, allowing more gains to be passed on to investors. Always compare ratios across similar funds.

• Risk Tolerance: Investing in contra funds requires patience and a higher risk tolerance. Since these funds focus on undervalued stocks, market recognition may take time. Investors should assess their risk appetite and investment horizon before committing to a contra fund.

How To Invest In Top Performing Contra Funds in 10 Years?

To invest in top-performing contra funds, start by researching and comparing different funds’ performance over the last 10 years. Look for funds with consistent returns, lower expense ratios and experienced fund managers who specialize in contrarian investment strategies.

Next, open an account with a reliable brokerage firm like Alice Blue, which offers a user-friendly platform for mutual fund investments. Alice Blue provides comprehensive services for investors, including access to top-performing contra funds and detailed fund performance data for informed decision-making.

Once your account is set up, select the contra fund that aligns with your investment goals and risk tolerance. Regularly monitor your portfolio and stay updated with market trends, adjusting your investments as needed to maximize long-term returns.

Advantages Of Investing In Top Performing Contra Funds in 10 Years?

The main advantages of investing in top-performing contra funds over the last 10 years include long-term capital appreciation, diversification, the potential to outperform in volatile markets and lower entry prices for high-quality stocks, offering significant growth opportunities for patient investors.

• Long-term Capital Appreciation: Contra funds invest in undervalued stocks, which have the potential to grow significantly when market conditions improve. This strategy allows for long-term capital appreciation, benefiting investors who are willing to hold onto their investments over time.
• Diversification: Investing in contra funds provides diversification by adding undervalued stocks from various sectors to a portfolio. This reduces reliance on trending or popular stocks and helps spread risk across different industries and market conditions.
• Potential to Outperform in Volatile Markets: Contra funds often outperform in volatile markets as their portfolio includes stocks that are not heavily impacted by market fluctuations. These funds tend to rise when the broader market recovers, offering better performance during uncertain times.
• Lower Entry Prices: Contra funds focus on buying high-quality stocks at lower prices. Investors gain access to strong companies at a discounted rate, allowing them to benefit from the stock’s eventual price appreciation as the market begins to recognize its value.

Risks Of Investing In Top Performing Contra Funds in 10 Years?

The main risks of investing in top-performing contra funds over the last 10 years include delayed market recognition, potential underperformance during bull markets, higher volatility and the need for a long investment horizon, which may not suit all investors.

• Delayed Market Recognition: Contra funds focus on undervalued stocks that may take time for the market to recognize. This delay can result in slow or stagnant returns for extended periods, requiring patience from investors before seeing potential gains.

• Potential Underperformance During Bull Markets: In strong bull markets, contra funds may underperform as they invest in stocks that are out of favour. When popular stocks are rising, contra funds may lag behind, missing out on short-term growth opportunities.

• Higher Volatility: Contra funds invest in undervalued stocks, which can be more volatile than market favourites. While this strategy aims for long-term gains, investors may experience more fluctuations in the short term, increasing the overall risk.

• Long Investment Horizon: Contra funds typically require a long-term commitment to realize their full potential. Investors with shorter investment horizons may not benefit from these funds, as market recognition of undervalued stocks can take years.

Importance of Contra Funds

Contra funds are important because they follow a contrarian strategy, investing in undervalued stocks that the market overlooks. This approach provides long-term capital appreciation as these stocks often experience significant growth when market sentiment eventually shifts in their favour.

Additionally, contra funds help diversify portfolios by including undervalued stocks from different sectors. This reduces risk, as they are less influenced by market trends. Their resilience during market downturns makes them a valuable investment option for those seeking stability and growth over time.

How Long Can You Stay Invested in Contra Funds?

Investors should stay invested in contra funds for at least 5 to 7 years to fully benefit from their long-term growth potential. These funds focus on undervalued stocks, which may take time to realize their true value and deliver returns.

Long-term investment in contra funds allows investors to ride out market volatility and gain from stock price appreciation when the market corrects. Patience is key, as these funds are best suited for those with a longer investment horizon and risk tolerance.

Tax Implications of Investing in Contra Funds

Investing in contra funds can have tax implications depending on the holding period. Long-term capital gains (on investments held for over a year) are generally taxed at a lower rate compared to short-term capital gains, which are taxed at higher rates.

Additionally, dividend income from contra funds is subject to tax based on the investor’s income bracket. It’s important to consider these tax impacts when planning investments and to consult a tax advisor to optimize tax efficiency based on individual financial situations.

Future of Contra Funds

The future of contra funds appears promising as they continue to attract investors seeking long-term growth through undervalued stocks. As markets evolve, these funds are likely to capitalize on emerging opportunities in overlooked sectors and companies, potentially delivering substantial returns.

With increasing market volatility and economic uncertainties, contra funds may become more relevant. Their contrarian approach can offer diversification and stability, helping investors navigate market fluctuations and capitalize on undervalued assets, which can be crucial for long-term investment success.

Top Performing Contra Funds in 10 Years – FAQs  

Disclaimer: The above article is written for educational purposes and the companies’ data mentioned in the article may change with respect to time. The securities quoted are exemplary and are not recommendatory.