Do you know you can go against the trend and earn better returns? Exactly! this is the unique contrarian strategy followed by the SBI Contra Fund. Their approach aims to deliver high-value returns over the long term, making it stand out in the crowd.

But how does a mutual fund benefit by going against the crowd? And why do investors trust this method over others?

Moreover, the SBI Contra Fund follows a simple approach that invests in undervalued companies or sectors that are currently out of favour but have strong growth potential. In addition, you can begin investing through SIP with a small amount.

What is SBI Contra Fund?

In simple terms, A Contra Fund is categorized as an open-ended equity MF handled by the fund house of SBI Mutual Fund that invests against the market trend. In this, the SBI Contra Fund selects stocks that are undervalued or out of favour but have strong long-term potential, and this approach is known as a contrarian investment strategy.

The contra fund works based on the buy low, wait & get benefit later strategy rather than running for trending companies. Fund experts invest in companies that others avoid or ignore, but bounce back in the future over time. This fund needs patience and long-term thinking, as returns are not immediate.

The fund is available in different options such as, SBI Contra Fund Regular Growth and SBI Contra Fund Regular Plan Growth. You can start with a Minimum SIP of Rs 500 & a lumpsum of Rs 5,000

Overall performance of the SBI contra fund shows an impressive 3-year compound annual growth rate (CAGR) of 39% and has delivered 17.02% average annual returns since inception. The fund has doubled your money every 3 years.

Its assets under management (AUM) as of July 2025 are around Rs 47,389 crore and it is tagged “Very High Risk,” & it aims for long-horizon returns.

How does SBI Contra Fund follow the Contrarian Strategy?

The contrarian investment strategy is a remarkable reason that investors are jumping into the SBI fund. Here is how the strategy works:

Contrarian Strategy

By investing in various equity & equity-related portfolios, using a contrarian strategy philosophy to buy undervalued or out-of-favour stocks & then selling shares when they are highly valued. SBI Contra Fund Regular Plan Growth aims to offer long-term capital appreciation.

Top-down & Bottom-up Approach

It picks stocks that have a great recovery capability & through the combination of in-depth company research with market trends. As market conditions improve and valuations rise, these companies can deliver higher returns.

Objective

An objective of this fund is to get the cash spreads investments across different sectors and market caps to balance risks while following the contrarian approach during market fluctuations.

Features of SBI Contra MF

Here are several benefits that the SBI Contra fund's regular growth provides:

Contrarian Investment Approach

Invests in undervalued or low-priced stocks and sectors that are currently out of favour in the market but have strong potential for growth.

Diversified Portfolio

Allocates funds across sectors & market capitalizations large cap, mid cap and small-cap to reduce risk effectively.

Focus on Long-Term Wealth Creation

SBI contra fund are ideal for a long-term horizon of 5 years or more, as the contrarian approach may take time to show growth and results.

Professional Management

Managed by experienced fund managers of SBI Mutual Fund, who follow a tried-and-true contrarian analysis & strategy.

Multiple Investment Options

Available in SBI Contra Fund Regular Growth and SBI Contra Fund Regular Plan Growth options. Investors can choose between lump sum or SIP modes.

Open-Ended Flexibility

As an open-ended fund, investors can enter or exit the scheme at any time, subject to applicable exit load and NAV.

Potential for Higher Returns

By investing at earlier in undervalued stocks, the fund has the potential to deliver the best returns when market crises shift.

Suitability of SBI Contra Mutual Fund

Before investing in this fund, know the suitability of SBI Contra MF:

Long-Term Investment Horizon

The contra fund follows a contrarian strategy; it takes time for undervalued stocks to grow their actual potential. So, Investors should stay invested for 5+ years or more.

Market Volatility

This fund might experience fluctuations in the short term as it invests in out-of-favour sectors or undervalued stocks, so it can be ideal for investors having moderate-to-high risk capacity.

Seek Diversification

Suitable for those who want to diversify their MF portfolio and spread to companies across various sectors and market capitalizations.

Want Potential for Higher Returns

Investors who are comfortable with a long-term view and some volatility can benefit from the fund's as a contra fund can generate higher returns when market sentiment changes.

Invested in Core Funds

SBI Contra MF works best as a satellite holding in addition to core investments like large cap or flexi cap funds.

Mastermind Behind SBI Contra Fund Regular Growth

Behind the success of any fund, there is an expert mastermind. Here Is:

• The masterminds behind the SBI contra fund are Dinesh Balachandran and he has been the lead fund manager since May 2018.
• Balachandran led the success of this fund with a contrarian strategy & top-down, bottom-up approach.
• He oversees other SBI flagship funds and brings strong value-investing discipline.

Conclusion

To wrap up, the SBI Contra mutual fund offers a high return. Investors find it attractive due to its contrarian strategy that identifies undervalued stocks with a mix of top-down and bottom-up approaches. The SBI MF offers long-term growth potential with expertise.

You can start investing in this mutual fund through a SIP which builds discipline in your financial journey.