You must be aware of how good contra funds are, but the SBI Contra Fund takes the benefits one step further. It gives you more than 16% of annualized returns and if you go for the long term, then you can create significant wealth as well. But, do you know the reason behind its success?
Well, to count a few, there is a unique investment philosophy and the support of expert fund managers. But knowing only this much will not satisfy your curiosity. So, in this post, you will get a detailed discussion of the SBI Contra Fund Regular Growth.
You will also get to know about the true potential of this scheme in the long term and a short comparison between the options of SIP and lump sum investment. This is going to be very interesting, so let's delve into it.
What are Contra Funds?
These types of mutual funds invest in underperforming stocks. These stocks are not favored by the market conditions. And conventional investors usually avoid such stocks. This is why the investment strategy of such funds is called the contrarian strategy. Because it is contrary to traditional investment strategies.
But are there any advantages of such funds? Since contrarian funds invest in undervalued stocks, you may also be thinking the same. So, let us know how good contra funds are.
What Are the Benefits of Contra Funds?
There are three main benefits that contra funds give you. And you cannot find them in other mutual fund schemes. Here they are:
Big Returns in the Future
Since contra funds invest in stocks that are undervalued at present. But their underperformance is mainly due to market conditions. Their intrinsic value is far greater than their current value.
And experts can easily identify such stocks from others. So, if you invest in these funds now, there is a very high possibility that you will earn great returns in your future.
Variety Protects From Risks
When you invest in contrarian mutual funds, you get the opportunity to invest in several sectors. And by diversifying your portfolio, you can make sure that when the market goes down.
Your investment is cushioned from the potential losses. The more you diversify your portfolio, the more it will be protected from market risks.
Create Your Wealth
If you have a long term investment horizon, then a contra fund can help you create wealth for your future. As a long term investor, you must have certain goals.
For example, you may want to secure your retirement or arrange financial support for your children's education. There can be several long term goals but with contra funds, it becomes easy to achieve them.
Now that you have read about the basics and the benefits of the contra funds, let us know about the SBI Contra Fund and learn about what is so unique about it.
What Is the Contra Fund of SBI?
Launched in July 1999, the SBI Contra Fund Regular Plan Growth is managed by SBI Fund Management Pvt. Ltd. (SBIFMPL) and is formally known as SBI Mutual Fund. The AMC is jointly handled by the State Bank of India and Amundi, a France based fund management company. A joint venture between these two renowned organizations is one of the key reasons behind its success. The following are the key features of the SBI Contra Fund:
- The investment objective of this scheme is to provide long term capital appreciation to you.
- The fund holds a very large AUM worth Rs 42,220 crores, reported as of March 2025.
- The scheme invests in companies like HDFC Bank, Reliance Industries, etc.
As you know, this fund also employs a contrarian investment strategy. But then, what makes it stand out from others in the market? Let’s find out.
What Is the Philosophy of the SBI Contra Fund?
The investment philosophy of the SBI Contra Fund revolves around the principles of contrarian strategy. The scheme identifies undervalued stocks and tries to get benefits from market inefficiencies. However, this is not it. The scheme upholds some other principles as well. First, it invests in companies that have strong fundamentals but are not able to attain their full potential.
Second, the active management of your portfolio. If you invest in the scheme, then your portfolio gets managed in a dynamic manner. It means your fund manager will identify potential investment opportunities in the market for you and adjust the portfolio accordingly.
And this investment philosophy is very good for long term investment plans. But why? The next section explains it for you.
Why Is the SBI Contra Fund Good For Long-Term Investment?
The undervalued stocks can only show their true potential of giving huge returns when they are retained for the long term. And since the risk of market volatility greatly affects short term investments, it is also a wise move to invest for the long run.
So, by investing for 5 years, 7 years, or more, you can reduce the impact of market fluctuations. This way, you can make sure that at the end of your long term investment plan, you will get the maximum returns. And if you have financial goals like purchasing a home then the SBI Contra Fund can help you achieve them.
Now, you must be thinking that any other mutual fund scheme can give such benefits in the long term. Then why should you invest in this particular scheme only? There are two powerful reasons for that.
Why Invest In the SBI Contra Fund?
Along with its investment philosophy, the following reasons tell you why you should invest in it:
Strong Track Record
The scheme has been giving annualized returns of more than 16% since its launch. It is outperforming its peers in the category with great margins. With such great returns, you can double your investment value within a few years.
Expert Fund Managers
Talented fund managers like Mr. Rama Iyer Srinivasan and Mr. Kesavan Venugopalan are managing your portfolio. They have years of experience in the financial services industry and know how to improve your returns very well.
You must be convinced by now of why SBI Contra Fund Regular Growth is an all rounder for you. But wait, which way are you going to invest in the scheme: SIP or lump sum? If you have any confusion regarding this, don’t worry, carefully read the next part and you will get the answer.
Which Is Better For the SBI Contra Fund: SIP or Lump Sum Investment?
Systematic investments are more suitable for you if you want a good way to invest your monthly savings. The SBI Contra Fund also allows you to start a systematic investment from the affordable amount of Rs 500 only. Such a small amount makes the scheme highly accessible for investors.
But if you are a confident investor and have a very big income, then you can go with the lump sum investment. By investing a huge chunk of money all at once, you will get the benefits like big returns when the market goes up and you will not need to remember the dates as well.
You have learnt so many interesting things about the SBI Contra Fund Regular Plan Growth such as its investment philosophy, its features, benefits, etc. Now, let us conclude the discussion.
Conclusion
In short, if you are looking for the most profitable way to use your SIP investment, then this scheme is for you. It can help you attain your long term financial goals while giving you stable returns throughout your journey. All thanks to its unique investment philosophy and expert fund managers working behind the curtain.
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