SBI Contra Fund Performance Analysis: Is It Right for You?

Writer : Swaraj Fin Pro | Date : 2024-10-25 18:25:23
SBI Contra

Have you heard the phrase, "Do not follow the crowd?" This idea forms the basis of a contrarian investment strategy.

Here, fund managers or investors select stocks that are undervalued compared to their intrinsic value or are less popular in the market. When the market reverses, these stocks tend to gain sharply, leading to substantial profits for the fund or investor.

Legendary investors like Warren Buffett are fans of this strategy. However, just as Buffett did, one must dedicate themselves to mastering it — and with Contra funds, you have an opportunity to do just that.

Today, we’re reviewing a fund that follows this very strategy: SBI Contra Fund. So, let’s dive in!

SBI Contra Fund Review

The SBI Contra Fund turned 25 a few months ago. Since its inception, it has delivered a return of 19.99% compared to its benchmark’s 16.12%. 

A monthly SIP of ₹10,000 would have grown to ₹7 crore by June 30, 2024.

However, the fund has had inconsistent performance in the past, as shown in the chart below. It’s only in recent years that it has started outperforming its peers and benchmark.


What is the return of SBI Contra Fund?


After a subpar performance during 2018-19, the fund reversed its fortunes. In 2018, Dinesh Balachandran took over as the fund manager, driving recent strong performance. 


According to an ET Money analysis, the fund’s asset allocation has shifted in recent years from large-cap stocks to mid- and small-cap companies.


The fund’s turnover ratio has also increased, indicating that the fund manager is frequently churning the portfolio instead of holding long-term positions.

We analyzed rolling returns to assess the fund’s consistency, finding that it outperformed peers and its benchmark by significant margins.

Return as on 18-Sep-20241 Year (%)3 Years (%)5 Years (%)7 Years (%)
SBI Contra Fund-Reg(G)41.0927.2032.4819.99
Kotak India EQ Contra Fund(G)49.9623.1925.6718.75
Invesco India Contra Fund(G)49.0822.1825.6618.32
BSE 50034.9216.3721.7514.99


Its portfolio consists of 106 stocks, with the highest allocation in the financial sector, including a 5.33% investment in HDFC Bank.


You can view detailed information about SBI Contra fund Regular Plan Growth:


Is SBI contra fund safe?

The fund has generated impressive returns in recent years by increasing its mid- and small-cap allocations and churning the portfolio frequently. But is the associated risk justified?

Examining the fund's volatility ranking, we find its standard deviation and beta are among the lowest in its category, placing it in the top quartile for lower volatility.

Scheme NameLaunch DateAUM (Crore)TER (%)Standard DeviationQuartile Rank - SDBetaQuartile Rank - Beta
SBI Contra Fund Reg Gr14-07-199941,326.631.5111.74Top Quartile0.84Top Quartile
Invesco India Contra Fund Gr11-04-200718,469.891.6412.96Upper Middle Quartile0.94Upper Middle Quartile
Kotak India EQ Contra Fund Gr27-07-20054,047.51.8713.11Bottom Quartile0.98Bottom Quartile


Is SBI Contra fund good to invest?

The SBI Contra Fund is ideal for investors who can commit for at least 7-10 years. 

The value or contra funds target companies with solid fundamentals that others may overlook, potentially offering substantial profits when the market turns. 

Additionally, during market downturns, these funds tend to fall less due to their investment in fundamentally strong companies.

Specifically, SBI Contra Fund has shown superior returns in recent years despite higher risks, managing volatility effectively. 

As such, it’s a solid consideration for long-term investment.

If you want to multiply your wealth in the upcoming years, you can invest in the SBI contra funds directly. Follow these steps to start investing:

  1. Download our app from Play Store or App store

  2. Do registration, KYC, and mandate

  3. Start an SIP or lumpsum

Also read: Analyzing Nippon India Growth Fund: Should You Invest?


FAQs

What is the return of SBI Contra Fund in the last 5 years?
The SBI Contra Fund has provided over 25% returns in the last five years.

What is the profit of SBI Contra Fund?
Since inception, the fund has delivered a 19.99% return. A ₹1 lakh lump-sum investment at inception would have grown to ₹95.3 lakh by June 28.

How can I view the SBI Contra Fund NAV history?
You can view the NAV history on Swaraj Finpro’s research page.

What is the SBI Contra Fund NAV today?
As of October 24, the NAV of SBI Contra Fund is 384.22.

Is SBI Contra Fund tax-saver or not?
No, SBI Contra Fund is not a tax-saving scheme.

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