Today on the 25th anniversary of India's first contra-oriented mutual fund scheme namely SBI Contra Fund, SBI Mutual Fund announced that if an investor had invested Rs. 10,000 in the scheme through a monthly SIP at its inception, the investment would now be worth Rs. 7.19 crores as of June 30, 2024.
The scheme has delivered notable returns of 20.84 per cent CAGR, turning Rs. 30 lakhs into Rs. 7.19 crore in 25 years, according to the fund house. As of June end, SBI Contra Fund holds an AUM of Rs. 34,366 crores with over 20.5 lakh live folios. In the last three years, the fund has returned 29.64 per cent returns
Contra funds are equity mutual funds that invest in stocks currently undervalued by the market in anticipation of their future growth. They are referred to as contrarian funds due to their practice of taking positions contrary to prevailing market trends. Underperforming stocks and sectors are picked at low price points with a view that they will perform in the long run. As these stocks are undervalued and may take several years to find favour from the market, investors are advised to keep a longer-than-usual investment horizon in mind.
SBI Contra Fund: Returns
The scheme has generated a 19.99 per cent return since inception in 1999 vis-à-vis 16.12 per cent of its benchmark BSE 500 TRI. If someone invested a lumpsum of Rs 1 lakh in the scheme when it was launched, the investment would have been worth Rs. 95.3 lakh as of June 28, 2024.
Since its inception, the scheme has offered point-to-point CAGR returns of 28.39 per cent in 5 years, 29.64 per cent in 3 years and 47.23 per cent over 1 year. During the same time period, the scheme’s benchmark (BSE 500 TRI) delivered only 19.95 per cent, 19.97 per cent and 38.40 per cent return, respectively.
Similarly, if SIP returns are compared, the SBI Contra fund has delivered returns of 17.94 per cent (15 years), 21.84 per cent (10 years), 35.62 per cent (5 years), 34.25 per cent (3 years) and 48.68 per cent (1 year). Its benchmark BSE 500 TRI's returns are 15.86 per cent (15 years), 17.73 per cent (10 years), 24.82 per cent (5 years), 25.40 per cent (3 years) and 43.02 per cent (1 year).
