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Contra Mutual Funds

Contra Mutual Funds take a distinctly unconventional route in the world of investing. Rather than following the crowd, contra funds seek out stocks or sectors that are currently underperforming but may be fundamentally sound. The idea is simple: what’s unpopular today could be tomorrow’s opportunity. Fund managers look for companies that are undervalued or temporarily beaten down, believing that the market often overreacts in the short term. As conditions change, these overlooked investments can bounce back. While the strategy isn’t without risk, contra mutual funds are built for investors who think long-term and aren’t afraid to go against the grain.

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List of Contra Mutual Funds

Filters
logo Kotak Contra Fund - Direct Growth

4.20%

Fund Size (Cr.) - 3,929

Invest
logo SBI Contra Fund - Direct Growth

3.06%

Fund Size (Cr.) - 39,433

Invest
logo Invesco India Contra Fund - Direct Growth

2.34%

Fund Size (Cr.) - 17,817

Invest

How Does a Contra Mutual Fund Work?

Contra mutual funds operate on the principle of contrarian investing i.e. buying into stocks or sectors that are currently out of favor but have strong long-term potential. Instead of following prevailing market sentiment, contra funds identify undervalued opportunities others might be overlooking due to short-term setbacks or negative sentiment. Fund managers assess companies with solid fundamentals that may be temporarily underperforming and invest with the expectation that market perceptions will eventually shift. This strategy requires patience and discipline, as the turnaround may take time.  The goal is to capitalise on market inefficiencies and cyclical trends, aiming for higher returns when these investments rebound. Contra mutual funds are best suited for long-term investors with a higher risk tolerance.
 

Popular Contra Mutual Funds

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 3,929
  • 3Y Return
  • 21.11%

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 39,433
  • 3Y Return
  • 19.98%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 17,817
  • 3Y Return
  • 19.82%

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FAQs

These funds are high-risk investments, focusing on undervalued equities and sectors with recovery potential. They involve higher volatility and demand a long-term perspective.

Investors with high risk tolerance and a long-term outlook can benefit. They are suitable for those looking for potential high returns and willing to navigate short-term market volatility.

Contra funds are designed for long-term investment. Ideally, you should stay invested for at least 5 to 7 years to allow enough time for undervalued stocks to recover and deliver potential returns.

Yes, beginners can invest in contra funds, but they should understand the higher risk involved. These funds suit investors with patience and a long-term outlook, as returns may take time to materialise.

No, a contra fund is not a debt fund. It is an equity mutual fund that invests in undervalued stocks using a contrarian strategy, aiming for long-term capital appreciation.

Contra funds primarily invest in equity shares of companies that are currently undervalued or out of favor but have strong recovery potential based on business fundamentals and long-term prospects.

Yes, contra mutual funds are open-ended, so you can redeem them anytime. However, exiting early may attract exit loads and may not yield optimal returns if the market cycle hasn’t turned.

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