Did you know the secret to building wealth does not always lie in following the crowd, but in going against it? That is exactly the bold strategy of the SBI Contra Fund.
This raises the question: how does a mutual fund benefit by going against the crowd? And why do investors continue to trust this method?
The answer lies in the fund's philosophy. The SBI Contra Fund avoids chasing popular market trends. Instead, it invests in undervalued companies and sectors that most investors are ignoring today but which hold strong potential for tomorrow's market.
What is Contra Fund?
A Contra Fund is categorized as an open-ended equity mutual fund that invests against the market trend. In this fund, an expert manager picks stocks that are undervalued or out of favour but have strong potential in the long run & this approach is called a contrarian investment strategy.
A contra mutual fund invests in a combination of large, mid & small cap stocks. The Contra Fund investing works by following the buy low, wait & get benefit later strategy. Fund managers invest in companies that others are avoiding, but may bounce back in the future.
Contra funds like the SBI Contra Fund regular plan growth option are ideal for investors who can tolerate risks with a medium- to long-term horizon.
Overview SBI Contra Fund
Here is the overview of SBI Contra Mutual Fund:
- The SBI Contra Fund is handled by the fund house SBI Mutual Fund, which is among India's largest and most trusted AMC.
- This fund invests in undervalued stocks and has given a strong reputation for delivering consistent returns.
- The SBI Contra Fund regular growth plan is especially popular among retail investors as it allows SIP.
- By adopting a contrarian strategy, the fund identifies strong businesses that are temporarily ignored by the market leaders and invests in them for long-term value creation.
- Due to a contrarian approach, this fund is tagged as very high risk.
- You can start investing with a regular SIP of Rs 500 and a lumpsum of Rs 5000.
- SBI Contra Fund's regular growth has Rs 46,947 Cr AUM as of August, with the NAV of Rs 413.87.
Investment Objective of the SBI Contra Fund
The investment objective is a remarkable reason that investors are jumping into this fund. Such as:
Contrarian Strategy
SBI contra fund investing in various equity & equity-related portfolios, using a contrarian strategy philosophy, means buying undervalued or out-of-favour stocks & then selling shares when they are highly valued. SBI Contra Fund Regular Plan Growth aims to offer long-term capital appreciation.
Top-Down + Bottom-Up Approach
SBI picks stocks that have a recovery capability, good-quality stocks & recover through the combination of in-depth company research with market swings.
Objective
An objective of this fund is to get the cash flows during market fluctuations. Make high returns & long-term benefits, invest when others are ignored & stay throughout the downturn.
This mutual fund offers such benefits that enhance your portfolio.
Benefits of Investing in SBI Contra Mutual Fund
Here are the key benefits of the SBI Contra fund's regular growth:
- Buy Low, Benefit Later: Investing in low-priced & undervalued shares that others come across them & sell them when the prices are high.
- Long-Term Growth Potential: Ideal for beginners and experienced investors who prefer consistent earnings over a long period.
- Diversified Portfolio: A diversified portfolio includes holdings in a range of sectors, including large, mid & small caps, to mitigate risk.
- Managed by Experts: Behind the success of the SBI contra fund is the experienced fund managers who follow a tried-and-true contrarian strategy and approach.
- Low Expense Ratio (Direct Plan): Most of the money you spend stays invested & increases when expenses are reduced.
- SIP-Friendly: SBI Contra Fund allows investors to start investing with a minimum amount of
Know whether this fund is suited to you from the next headline.
Who Should Invest in the SBI Contra Fund?
You can invest in the SBI Contra Fund Regular Plan Growth if these points suit you:
Long-Term Investors
If you can invest for a long horizon, with a long-term financial goal, then this fund rewards you with compound returns.
Risk-Tolerant Individuals
Suited for investors who are ready to accept market fluctuations & downturns in return for higher long-term profits.
Value Investors
If you know and accept buying undervalued stocks & have patience, allowing them to grow, then the SBI Contra fund is for you.
Beginner or Experienced Investors
Perfect for those who go with contrarian strategies & want to diversify their portfolio.
Well, these points lead you to question the expertise of this fund.
Mastermind Behind SBI Contra Fund Regular Growth
Behind the success of any fund, there is an expert mastermind. Here is:
- The masterminds behind the SBI contra fund are Dinesh Balachandran and he has been the lead fund manager since May 2018.
- Balachandran led the success of this fund with a contrarian strategy & top-down, bottom-up approach.
- He oversees other SBI flagship funds and brings strong value-investing discipline.
- His disciplined value-investing style has been instrumental in making the SBI Contra Fund a regular growth one of the most trusted contra funds in India.
Conclusion
To wrap up, the SBI Contra mutual fund offers better investment results. Investors find it attractive due to its contrarian strategy that identifies undervalued stocks with a mix of top-down and bottom-up approaches.
The SBI MF offers long-term growth potential with expertise. You can start investing in this mutual fund through a SIP, which builds discipline in your financial journey.
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