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This SIP In Contra Fund Given Upto 86% Return: Top Rated By Crisil
A Contra fund is based on a contrarian approach of investing in the equity markets.
SIP investment in Contra funds
Generally, investors or mutual fund managers search for stocks that have performed considerably well in recent past years. However, in Contra funds, the fund managers take an unpopular approach; they invest in stocks that have not performed well in short term in the equity markets. These funds tend to buy stocks at low prices at the current period, expecting the stocks will fetch good returns in the future. At that time, the share price of the stocks will run high, and it will fetch good returns to the mutual fund and SIPs. Investors with a strong risk appetite usually go for these funds. However, the below-mentioned SIP Contra fund has been rated 5 star by reputed research firm Crisil and given good returns among the peer funds.
The SBI Contra Fund - Direct Plan
The SBI Contra Fund - Direct Plan has given 21.14% (absolute) return in the last 1 year, 66.90% return in the last 2 years, 78.92% return in the last 3 years, and 86.18% return in the last 5 years. The annualized return of this contra fund SIP was 58.07% in the past 2 years, 41.58% in the past 3 years, and 25.1% in the past 5 years.
This fund's assets under management (AUM) is Rs. 3338.74 Crore, and the Expense Ratio is 1.41%. However, the category's average Expense Ratio is 0.98%, which means other funds have a lesser ER on average than this fund. The SBI Contra Fund's NAV or unit price stood at Rs. 218.52 as of January 7, 2022.
If you sell the fund after 1 year of investment, the long-term capital gain tax will be imposed.
SBI Contra Fund - Portfolio
The SBI Contra Fund - Direct Plan holds an 84.85% position in equities, 4.74% in Foreign Equities, and 11.66% in other sectors. The to5 5 holdings of this fund are Tube Investments Of India Ltd. (Auto ancillaries), ICICI Bank, HCL Technologies, MTAR Technologies Ltd. (Defense), and Reliance Industries Ltd. (Refineries/marketing). The SBI Contra Fund invests in a total of 67 stocks. Among them, the Large Cap Investments are 31.3%, Mid Cap Investments are 9.55%, Small Cap Investments are 30.79%, 17.95% in others. Bank, auto ancillary, pharma, computer, and the real estate sectors are staying at the top of the fund's investment portfolio.
In this peer, there are also funds like Kotak India EQ Contra Fund - Direct Plan, and Invesco India Contra Fund - Direct Plan, which an investor can check. Crisil has given 3 star to the Kotak India fund and has given 2 star to the Invesco India fund.
(Also read: 3 Best Mutual Fund SIPs In ELSS (Tax-Savings) Category, 4 Star Rated By Value Research)
Disclaimer
Investing in equities/SIPs poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, and the author, are not liable for any losses caused as a result of decisions based on the article.
