Contra Mutual Funds

It is important to identify the benefits of schemes before investing in a Contra Fund. Here are some key points to focus on:

1. Higher Returns Potential: Contra Funds focus on undervalued stocks that have the potential to deliver high returns once they recover.

2. Less Competition: They invest in companies often overlooked by others, leading to less impact from institutional trading.

3. Buying Low: These Mutual Funds buy stocks when prices are low, allowing investors to benefit from future gains.

4. Better in Downturns: Contra funds tend to hold their value better during market crashes compared to high-risk stocks.

5. Unlock Hidden Value: They invest in stocks with hidden potential, which can surge in value when underlying issues are resolved.

Investing in Contra Mutual Funds offers the chance for significant gains and can be a good strategy during market volatility.

Let's look closely at the 3 Best Contra Funds in India to invest in:

1. SBI Contra Fund

   After being launched on 14 July 1999, makes SBI Contra Fund is the oldest Equity scheme in its category. It holds an impressive AUM (Asset under Management) at Rs.29586 Crores as of 30^th April 2024. SBI finds opportunities across different market caps and sectors by using top-down and bottom-up analysis. This stock has built its strategy on patience and capitalizes on the future recovery of the investments purchased at low valuations.

2. Invesco Contra Fund

   The Invesco India Contra Fund was established on 11th April 2007. It has shown a robust performance of 18.51% returns in the last 3 years whereas its benchmark has given only 13.96% returns. They use a contrarian investment approach that is set on investing in fundamentally strong companies in the temporarily unpopular sector and keeping them for a long duration. Invesco's expertise is their right execution of investing strategy which boosts the chances of this scheme's success.

3. Kotak India EQ Contra Fund

   Being a contra-style fund, the Kotak India EQ Contra Fund is built with a combination of quantitative and fundamental analysis. Since its arrival, the fund has delivered a strong 18.51% return, significantly outperforming its benchmark index, which returned only 13%. With the renowned reputation of Kotak AMC, it has been a consistent performer with 85% consistency in generating high returns.
   
   

The following steps will be your easy step-by-step guide to investing in Contra Mutual Funds:

Step 1: Log in to MySIPonline

Step 2:  Check your KYC and if it is not registered do Video KYC

Step 3: Complete profile (PAN card, Aadhar number, bank details, nominee & signature)

Step 4: Explore the Best Contra Fund from Respective AMC Name or Talk to an expert

Step 5: Select your preferred Contra Fund

Step 6: Add funds to the cart and choose the investment option between sip or lumpsum

Step 7: Make a payment from UPI or net banking

Step 8: Track your investment daily at the dashboard and use our analysis to manage it.

These steps provide a simple way to begin, allowing you to invest through SIP for greater flexibility in your portfolio.

It is necessary to check if the contra fund is suitable for you, read the following points to know more:

Patient Investors: Contra funds often invest in undervalued stocks that can take time to recover. Therefore, they are suitable for investors who can wait patiently for 3-4 years to see substantial returns.

Long-term Investors: These funds are designed for long-term growth rather than short-term gains. Investors who understand and accept that it may take several years for the investments to realize their full potential are more likely to benefit from contra funds.

Investors with Strong Conviction: Ideal for those who have confidence in their investment strategy and the potential of the chosen contra funds. Investors need to believe in their choices despite market volatility and periods of underperformance.

Also, you can simplify your investments by using the SIP Calculator and get to know your estimated returns.