Top Performing Contra Funds in 5 Years

The below table shows a list Of the Top Performing Contra Funds in 5 Years based on AUM, NAV and minimum SIP.

Introduction to Top Performing Contra Funds in 5 Years

SBI Contra Fund

SBI Contra Fund is a Contra mutual fund scheme from SBI Mutual Fund. This fund has been operational for 11 years and 8 months, and it was launched on January 1, 2013.

SBI Contra Fund falls under the Contra Fund category with an AUM of ₹34,366.43 crores, a 5-year CAGR of 34.21%, an exit load of 1% and an expense ratio of 0.59%. The SEBI risk category is Very High. Its asset allocation includes 0.05% in Rights, 0.78% in REITs & InvIT, 6.95% in Cash & Equivalents, 6.97% in Treasury Bills and 85.25% in Equity.

Invesco India Contra Fund

Invesco India Contra Fund is a Contra mutual fund scheme from Invesco Mutual Fund. This fund has been operational for 11 years and 8 months, and it was launched on January 1, 2013.

Invesco India Contra Fund falls under the Contra Fund category with an AUM of ₹17,268.79 crores, a 5-year CAGR of 26.70%, an exit load of 1% and an expense ratio of 0.51%. The SEBI risk category is Very High. Its asset allocation includes 1.16% in Futures & Options, 1.76% in Rights, 2.02% in Cash & Equivalents and 95.06% in Equity.

Kotak India EQ Contra Fund

Kotak India EQ Contra Fund is a Contra mutual fund scheme from Kotak Mahindra Mutual Fund. This fund has been operational for 11 years and 8 months, and it was launched on January 1, 2013.

Kotak India EQ Contra Fund falls under the Contra Fund category with an AUM of ₹3,499.74 crores, a 5-year CAGR of 26.89%, an exit load of 1% and an expense ratio of 0.56%. The SEBI risk category is Very High. Its asset allocation includes 1.10% in Cash & Equivalents and 98.90% in Equity.

What Are Contra Funds?

Contra Funds are a type of mutual fund that follows a contrarian investment strategy. These funds invest in stocks that are currently out of favour or undervalued by the market, based on the belief that these stocks will eventually be recognized for their true value and outperform in the long run.

Contra Fund managers typically look for companies with strong fundamentals that are temporarily facing challenges or negative market sentiment. They aim to identify potential turnaround stories or hidden gems that the broader market has overlooked.

These funds require a high level of research and analysis to identify undervalued stocks with potential for future growth. They are generally suitable for investors with a high-risk tolerance and a long-term investment horizon.

Features Of Top Performing Contra Funds in 5 Years

The main features of top-performing Contra Funds in 5 years include a contrarian investment approach, the potential for high returns, active management, diversification across market caps and a longer investment horizon. These funds aim to capitalize on market inefficiencies and undervalued opportunities.

• Contrarian approach: Contra Funds invest in out-of-favour stocks or sectors, going against current market trends to identify potential value opportunities.

• High return potential: By investing in undervalued stocks, these funds aim to generate superior returns when the market recognizes the true value of these companies.

• Active management: Fund managers actively research and analyze stocks to identify undervalued opportunities, requiring a high level of expertise and market insight.

• Diversification: Contra Funds often invest across various market capitalizations and sectors, providing a diverse portfolio of undervalued stocks.

Best Performing Contra Funds in 5 Years

The table below shows the Best Performing Contra Funds in 5 Years based on the lowest to highest expense ratio.

Top Performing Contra Funds in 5 Years In India

The table below shows the Top Performing Contra Funds in 5 Years In India Based on the Highest 3Y CAGR.

Top Performing Contra Funds in 5 Years List

The table below shows the Top Performing Contra Funds in the 5 Years List 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 5 Years

The main factors to consider when investing in top-performing Contra Funds in 5 years include fund manager expertise, fund performance, investment strategy, risk tolerance and investment horizon. These factors can significantly impact the fund’s performance and suitability for your portfolio.

• Fund manager expertise: Evaluate the fund manager’s experience and track record in implementing contrarian strategies. Their ability to identify undervalued stocks is crucial.

• Fund performance: Analyze the fund’s historical returns over various time periods and compare them with its benchmark index and category average. Look for consistent long-term performance.

• Investment strategy: Understand the fund’s approach to identifying undervalued stocks and its criteria for stock selection. Ensure it aligns with your investment philosophy.

• Risk tolerance: Assess your ability to withstand short-term volatility, as Contra Funds can experience periods of underperformance before their strategies pay off.

• Investment horizon: Consider your investment timeframe, as Contra Funds typically require a longer investment horizon to realize their potential returns.

How To Invest In Top Performing Contra Funds in 5 Years?

To invest in top-performing Contra Funds in 5 years, start by researching and comparing different funds based on their performance, investment strategy and fund manager expertise. Once you’ve selected a fund that aligns with your financial goals and risk tolerance, you can invest through Alice Blue.

Alice Blue is a user-friendly online investment platform that provides tools and resources to help you make informed investment decisions. You can choose to invest a lump sum amount or opt for a Systematic Investment Plan (SIP), which allows you to invest a fixed amount regularly.

For most investors, a SIP is recommended as it helps in rupee cost averaging and reduces the impact of market volatility on your investment over time. Remember to review and rebalance your investment periodically to ensure it remains aligned with your financial goals.

Advantages Of Investing In Top Performing Contra Funds in 5 Years?

The main advantages of investing in top-performing Contra Funds in 5 years include the potential for high returns, diversification benefits, professional management and exposure to undervalued opportunities. These funds offer a unique investment approach for investors seeking alpha generation.

• High return potential: By investing in undervalued stocks, Contra Funds aim to generate superior returns when the market recognizes their true value.

• Diversification: These funds often invest across various market capitalizations and sectors, providing a diverse portfolio of undervalued stocks.

• Professional management: Experienced fund managers conduct in-depth research to identify undervalued opportunities, leveraging their expertise and market insights.

• Contrarian approach: Contra Funds can potentially benefit from market inefficiencies and provide returns that are less correlated with broader market trends.

Risks Of Investing In Top Performing Contra Funds in 5 Years?

The main risks of investing in top-performing Contra Funds in 5 years include higher volatility, the potential for prolonged underperformance, dependence on manager expertise and market risk. These factors can impact the fund’s performance and lead to significant fluctuations in returns.

• Higher volatility: Contra Funds can experience significant short-term fluctuations as undervalued stocks may take time to realize their potential.

• Prolonged underperformance: The contrarian approach may lead to periods of underperformance if market trends continue to work against the fund’s holdings.

• Manager dependency: The fund’s success heavily relies on the fund manager’s ability to identify truly undervalued stocks. Poor decisions can significantly impact returns.

• Market risk: Like all equity investments, Contra Funds are subject to overall market risks and can decline in value during market downturns.

Importance of Contra Funds

The main importance of Contra Funds lies in their potential to generate alpha, provide diversification benefits, capitalize on market inefficiencies and offer a unique investment approach. These funds play a crucial role for certain investors seeking exposure to undervalued opportunities.

• Alpha generation: Contra Funds aims to outperform the market by identifying undervalued stocks with the potential for significant appreciation.

• Diversification: These funds can provide exposure to stocks and sectors that may be overlooked by other investment strategies, enhancing overall portfolio diversification.

• Market inefficiency exploitation: Contra Funds seek to capitalize on market inefficiencies and investor biases, potentially benefiting from mispriced assets.

• Alternative perspective: They offer investors an alternative approach to traditional growth or value investing strategies, adding a unique dimension to investment portfolios.

How Long to Stay Invested in Contra Funds?

The ideal investment horizon for Contra Funds is typically 5-7 years or longer. This extended timeframe allows the fund’s contrarian strategy to play out and for undervalued stocks to realize their potential. Contra Funds often require patience as their holdings may take time to be recognized by the broader market.

A longer investment period also helps smooth out the short-term volatility that these funds can experience. It’s important to regularly review the fund’s performance and strategy, but avoid making hasty decisions based on short-term underperformance, as the contrarian approach may take time to yield results.

Tax Implications of Investing in Contra Funds

Contra Funds are taxed as equity mutual funds in India. For holding periods up to 1 year, gains are considered short-term capital gains and taxed at 15%. For holding periods over 1 year, long-term capital gains up to ₹1 lakh per financial year are tax-free.

Long-term capital gains exceeding ₹1 lakh are taxed at 10% without indexation benefits. It’s important to note that these tax rates are subject to change based on government policies. The tax efficiency of equity funds like Contra Funds can make them attractive for long-term investors.

Future of Contra Funds

The future of Contra Funds in India looks promising, driven by factors such as increasing market sophistication, demand for alpha-generating strategies and the potential for market inefficiencies in emerging sectors. As the Indian equity market evolves, these funds may find more opportunities to capitalize on undervalued stocks.

However, their success will continue to depend heavily on fund manager expertise and the ability to identify truly undervalued opportunities. The future performance of Contra Funds will likely be influenced by overall market conditions, regulatory changes and the ongoing development of analytical tools and research methodologies.

Top Performing Contra Funds in 5 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.