SBI Mutual Fund Scheme Gives High Returns: SBI Contra Fund, a scheme of the country’s leading fund house SBI Mutual Fund, has given tremendous returns to its investors over the past several years. Investors in the stock market usually look for stocks that perform well. But the strategy of SBI Contra Fund is to invest in such stocks that are currently performing poorly in the market, but which have the potential to achieve good growth in the future. Following this strategy, SBI Contra Fund has given an average annual return of more than 32% in the last 5 years, which is about 9% more than its benchmark BSE 500 Total Return Index. In the last 3 and 10 years also, the return of this fund has been better than the benchmark.
Past Performance of SBI Contra Fund
SBI Contra Fund has given the highest returns in its category during the last 3 and 5 years. The previous years’ data of the scheme bears testimony to its superior performance:
– Average Annual Return over 5 years (Regular Plan): 31.81%
, Average Annual Return over 5 years (Direct Plan): 32.83%
– Benchmark Return: 23.02%
– Average Annual Return over 3 years (Regular Plan): 27.40%
– Average Annual Return over 3 years (Direct Plan): 28.51%
– Benchmark Return: 18.37%
– Average annual return over 10 years (regular plan): 17.28%
– Average annual return over 10 years (Direct Plan): 18.11%
– Benchmark Return: 15.14%
Also read: Mutual Fund Toppers: 14 champions of equity funds! These schemes gave the highest returns in their category in 5 years
Investment Strategy of SBI Contra Fund
SBI Contra Fund is an open-ended equity scheme that follows a contrarian investment strategy. It aims to invest in stocks that are currently underperforming but have the potential to deliver high returns in the long term. About 65% of the fund is invested in stocks that fall under this theme, and the remaining 35% is invested in other stocks, debt, or money market instruments.
How to Invest in SBI Contra Fund
Apart from lump sum investment in SBI Contra Fund, regular investment can also be made through Systematic Investment Plan (SIP). The minimum investment amount for both is as follows:
- Lumpsum investment: Minimum Rs 5,000
- Investment through SIP: Starting from Rs 500.
- Expense Ratio (Regular Plan): 1.52% (till August 31, 2024)
- Expense Ratio (Direct Plan): 0.57% (till August 31, 2024)
Expense Ratio is the fee that the investor has to pay for the management of the mutual fund. This expense is less in the direct plan, because in this there is no commission to be paid to the broker or agent.
Also read: These 6 schemes of HDFC Mutual Fund gave 42% to 78% profit in 1 year, should you invest?
Investment Portfolio of SBI Contra Fund
SBI Contra Fund’s portfolio is well diversified and includes stocks of several strong companies. It invests primarily in stocks that are fundamentally strong. The key companies in the fund’s top holdings and their share in the corpus are given below:
- HDFC Bank Ltd.: 5.28%
- GAIL (India) Ltd.: 2.48%
- Tech Mahindra Ltd.: 2.4%
- Kotak Mahindra Bank Ltd.: 2.32%
- Indus Towers Ltd.: 2.31%
- Whirlpool of India Ltd.: 2.24%
Allocation of different sectors
The sectoral allocation in the portfolio of SBI Contra Fund is as follows:
- Financial Services: 18.75%
- IT Sector: 9.54%
- Oil and gas: 9.52%
- Healthcare: 7.52%
- Sovereign: 6.97%
- FMCG: 5.47%
Also read: Top 7 passive funds of SBI Mutual Fund giving returns of 40% to 62%, why ETF and index funds are better for investment
Fund Managers of SBI Contra Fund
SBI Contra Fund is being managed by two fund managers. Both are very experienced fund managers who have a long experience of working in the industry.
1. Dinesh Balachandran (since May 2018)
– Experience: More than 22 years
– Worked at Fidelity (USA) for over 10 years across Structured Finance and Fixed Income.
– B.Tech from IIT Mumbai and MS degree from MIT. Also a CFA charterholder.
2. Pradeep Keshavan (from December 2023)
– Experience: More than 18 years
– He has worked at Alantra Securities, Accenture, and Morgan Stanley
– His expertise is in equity strategy and corporate finance.
Also read: Mutual Fund SIP: How to raise Rs 1.78 crore starting with just Rs 1000 every month!
Why invest in SBI Contra Fund?
The performance of SBI Contra Fund has been very good in the last few years. In the last 5 years, it has given the highest returns in its category. It is also clear from the above data that SBI Contra Fund has repeatedly outperformed its benchmark, which shows the success of its investment strategy. This fund invests in stocks which are currently performing poorly, so the risk in it is also high. Therefore, before investing in this fund, investors should understand their risk taking capacity. This fund can be right for those who understand the contrarian investment strategy of the fund and want to invest in it. This fund is right for those investors who are ready to invest for the long term and are willing to take more risk for high returns.If you are confused about investing in this scheme, then you should consult your financial advisor before taking any decision.
(Disclaimer: The purpose of this article is only to provide information, not to recommend investment in any scheme. Past returns of equity mutual funds cannot be considered as a guarantee of similar performance in future. Take any investment decision only after getting complete information and taking advice from your investment advisor.)
