SBI Contra Funds

SBI Contra Mutual Fund has followed a contrarian investment strategy since its allotment on July 5, 1999. Managed by Mr Dinesh Balachandran since May 2018 and Mr Pradeep Kesavan for overseas investments since December 2023, the fund is one of the renowned funds on the SBI Mutual Fund list. It leverages over 21 years of experience from Mr Balachandran and 18 years from Mr Kesavan.

As of June 30, 2024, the fund’s Average Assets Under Management (AAUM) is ₹32,817.96 crores, and Assets Under Management (AUM) is ₹34,366.71 crore. Its primary benchmark is the BSE 500 Total Return Index (TRI). The exit load is 1% within the first year, with no entry load. SBI Contra Fund NAV stood at ₹382.3854 on July 23, 2024.

Available plans include regular and direct, with Growth and Income Distribution cum Capital Withdrawal (IDCW) options. The fund supports Systematic Investment Plans (SIPs) with flexible investment options starting from ₹500. For more details on SIP, refer to the latest notice issued dated June 02, 2020.

SBI Contra Fund Investment Objective

The investment objective of SBI Contra Fund, one of the best SBI Mutual Fund schemes based on returns, is to provide investors with the opportunity for long-term capital appreciation. This is achieved by investing in a diversified portfolio of equity and equity-related securities using a contrarian investment strategy.

By buying stocks when others are selling and selling when others are buying, the fund aims to capitalise on market inefficiencies. Since its inception, the fund has consistently delivered strong returns, making it a popular choice among investors seeking growth. This approach allows investors to benefit from market fluctuations, positioning the fund as a reliable option within the best SBI Mutual Fund offerings.

Risk Involved in SBI Contra Funds

SBI Contra Fund is categorised as a very high-risk fund. This implies a potential for substantial returns but also a heightened risk of capital loss. Investors should be mindful of market fluctuations as the fund primarily invests in equities.

Furthermore, its concentrated portfolio and exposure to specific sectors can amplify both gains and losses. Liquidity risk, arising from potentially illiquid stocks, is another factor to consider. Given the fund’s high-risk nature, thorough research or financial advice is crucial before investing in the SBI MF Contra Fund.

Return Potential in SBI Contra Funds

SBI Contra Fund offers the potential for substantial returns by investing in undervalued stocks and companies. However, it’s crucial to understand that past performance is not indicative of future results.

The provided data suggests a Sharpe Ratio of 1.69, which indicates that SBI Contra Fund can generate returns exceeding the risk-free rate. This indicates that the fund has the potential to generate positive returns that exceed the interest rate on a risk-free investment.

The fund’s high equity turnover (0.18) hints at an active management approach that could potentially lead to higher returns. However, it’s important to remember that the fund’s high-risk nature means there’s also a significant chance of capital loss. Investors should carefully consider their risk tolerance before investing in the SBI MF Contra Fund.

Who Should Invest in SBI Contra Funds?

SBI Contra Fund can be suitable for investors with a high-risk appetite and a long-term investment horizon. This fund aims to capitalise on market inefficiencies by investing in undervalued stocks. Due to their contrarian investment strategy, they can be volatile in the short term.

Investors who believe in the fund manager’s ability to identify undervalued stocks and have the patience to ride out market fluctuations can consider the SBI Contra Fund. However, it’s crucial to remember that past performance is not indicative of future results, and there’s no guarantee of profits. Before investing, thorough research or consultation with a financial advisor is recommended.