FUND
NAV
Press Enter or Space to open search suggestions
Press Enter or Space to open search suggestions
Trusted by 2M+ Users
Squeeze the most out of your trades with Lemonn - your right investment partner.
FUND
NAV
Squeeze the most out of your trades with Lemonn - your right investment partner.
Filters
NAV RANGE
FUND
NAV
Overview
Contra mutual funds follow a contrarian investment strategy.
Instead of concentrating only on stocks or sectors currently popular with investors, a contra fund may look for opportunities in companies, industries, or market segments that are temporarily out of favour.
The strategy relies on the idea that market sentiment can sometimes become excessively optimistic or pessimistic.
Being contrarian does not mean automatically buying every falling stock. The fund manager still needs to identify businesses where negative sentiment appears excessive relative to long-term fundamentals.
Explained
A Contra Fund is an equity mutual fund that follows a contrarian investment strategy.
Under SEBI's current mutual fund categorisation framework, Contra Funds must invest at least 80% of their total assets in equity and equity-related instruments.
The strategy may look for companies that:
A contrarian strategy can overlap with value investing, but the two concepts are not identical.
Explained
The fund manager looks for situations where market expectations may be too negative.
Suppose an industry is experiencing a temporary slowdown and investors have sold many of its stocks.
A contra manager may analyse whether selected companies have:
The strategy can take time to work because unpopular investments may remain unpopular for long periods.
Suitability
Contra Funds may suit investors who:
Investors who frequently move money into whatever strategy performed best recently may find contra investing difficult to follow consistently.
Advantages
Contrarian investing seeks opportunities before they become widely popular. If the investment thesis proves correct, investors may benefit as business fundamentals and market sentiment improve.
Out-of-favour companies can sometimes trade at attractive valuations. This can provide opportunities when negative expectations appear excessive.
Contra Funds may hold companies or sectors that are underrepresented in momentum-driven or popular market strategies.
Determining whether a struggling company is temporarily weak or structurally impaired requires detailed research. Fund managers analyse company finances, industry conditions, management, and valuations before investing.
Before you invest
A stock can be unpopular for valid reasons. If the underlying business continues deteriorating, buying against market sentiment can result in further losses.
The market may take years to recognise the value a fund manager sees in an investment. There is also no guarantee that recognition will occur.
The strategy depends heavily on distinguishing temporary problems from permanent deterioration. Incorrect analysis can turn a contrarian investment into a value trap.
Contrarian strategies can underperform when popular growth or momentum stocks continue leading the market.
Two Contra Funds can interpret contrarian investing differently. Review actual holdings and the manager's investment philosophy.
Taxation
Contra Funds generally qualify as equity-oriented mutual funds when they satisfy the applicable requirements.
For qualifying units held for more than 12 months, gains are generally classified as long-term capital gains.
Long-term capital gains covered by Section 112A are generally taxed at 12.5% above the applicable annual exemption threshold.
Qualifying gains on units held for 12 months or less are generally treated as short-term capital gains and taxed at the applicable special rate under Section 111A.
Tax rules may change, so check current provisions before redemption.
Step by step
Good to know
A Contra Fund is an equity mutual fund that follows a contrarian investment strategy, looking for opportunities in stocks or sectors that may be out of favour with the market.
Under SEBI's current categorisation framework, Contra Funds must invest at least 80% of total assets in equity and equity-related instruments.
Value Funds focus on securities considered undervalued. Contra Funds specifically follow a contrarian strategy that seeks opportunities where prevailing market sentiment may be excessively negative. The approaches can overlap in practice.
They carry equity-market risk as well as strategy risk. Out-of-favour investments can remain weak or deteriorate further.
Yes. Contrarian strategies can remain out of favour for extended periods before an investment thesis works, if it works at all.
No. Some stocks fall because their underlying businesses have genuinely deteriorated.
Recap
Loved by 2M+ users with a 4.3+ ⭐ app rating. Join now!
Squeeze the most out of your trades with Lemonn - your right investment partner.
FUND
Kotak Contra Fund - Growth - DirectEquity Contra₹181.14
0.42%
1.82%
14.65%
14.44%
Invesco India Contra Fund Direct Plan GrowthEquity Contra₹159.17
0.39%
-0.19%
14.16%
13.47%
SBI Contra Fund Direct GrowthEquity Contra₹408.97
0.06%-1.95%
10.45%
15.32%
Bandhan Contra Fund Direct GrowthEquity Contra₹9.83
0.08%N.A.
N.A.
N.A.
Motilal Oswal Contra Fund Direct Payout Inc Dist cum Cap WdrlEquity Contra₹10.9
0.31%N.A.
N.A.
N.A.
Kotak Contra Fund -Direct Reinvestment of Income Dis cum Cap wdrlEquity Contra₹64.46
0.42%1.82%
14.65%
14.44%
Invesco India Contra Fund Direct Plan Payout of Income Dist cum Capital WtdrlEquity Contra₹66.28
0.39%-1.34%
13.72%
13.08%
Invesco India Contra Fund Direct Plan Reinvestment of Income Dist cum Capital WtdrlEquity Contra₹66.28
0.39%-1.34%
13.72%
13.08%
SBI Contra Fund Direct Reinvestment Inc Dist cum Cap WdrlEquity Contra₹86.31
0.06%-1.95%
10.45%
15.32%
Bandhan Contra Direct Annually Payout Inc Dist cum Cap WdrlEquity Contra₹9.83
0.08%N.A.
N.A.
N.A.
Motilal Oswal Contra Fund Direct GrowthEquity Contra₹10.9
0.31%N.A.
N.A.
N.A.
Motilal Oswal Contra Fund Direct Reinvestment Inc Dist cum Cap WdrlEquity Contra₹10.9
0.31%N.A.
N.A.
N.A.
Showing 1–12 of 12
