SBI Contra Fund is an open-ended equity mutual fund managed by SBI Mutual Fund, employing a contrarian investment strategy. This approach involves investing in undervalued stocks that are currently out of favor but have strong long-term growth potential.
Key Fund Details
- Fund Type: Equity – Contra
- Launch Date: May 9, 2005
- Fund Managers: Dinesh Balachandran and Pradeep Kesavan
- Assets Under Management (AUM): ₹42,220.04 crore (as of April 2025)
- NAV (Direct Plan – Growth): ₹391.59 (as of April 16, 2025)
- Benchmark: NIFTY 500 TRI
- Risk Level: Very High
- Exit Load: 1% if redeemed within 1 year
Minimum Investment:
- Lump Sum: ₹5,000
- Additional Investment: ₹1,000
- SIP: ₹500
Expense Ratio:
- Direct Plan: 0.64%
SBI Contra Fund Share Price
- Direct Plan – Growth Option: ₹391.59
- Regular Plan – Growth Option: ₹359.34
Fund Managers of SBI Contra Fund
As of April 2025, the SBI Contra Fund is managed by two experienced professionals:
Dinesh Balachandran
- Role: Lead Fund Manager since May 2018
- Education: B.Tech from IIT Bombay, M.S. from MIT (USA), and CFA charterholder
- Experience: Over 22 years in the financial industry. He began his career at Fidelity Investments in Boston, USA, in 2001, covering structured finance and the U.S. fixed income market. He joined SBI Funds Management in 2012 as a Senior Credit Analyst, later becoming Head of Research before transitioning to fund management.
Pradeep Kesavan
- Role: Co-Fund Manager since December 2023
- Education: B.Com, MBA (Finance), and CFA charterholder
- Experience: Over 18 years in the financial sector. Prior to joining SBI Mutual Fund, he worked with organizations such as Elara Capital, Accenture Strategy, Morgan Stanley, and 3i Infotech.
Both fund managers bring a wealth of experience and expertise to the SBI Contra Fund, leveraging their backgrounds to implement a contrarian investment strategy aimed at identifying undervalued opportunities in the market.
Investment Strategy
SBI Contra Fund employs a contrarian investment strategy, focusing on sectors and companies currently out of favor but with strong fundamentals and long-term growth potential.
This approach involves identifying undervalued stocks trading below their intrinsic value, aiming to capitalize on market inefficiencies.
Suitability
This fund is suitable for investors with a high-risk tolerance and a long-term investment horizon (minimum of 5 years).
It’s ideal for those seeking capital appreciation through a diversified equity portfolio managed with a contrarian investment approach.
Conclusion
SBI Contra Fund has established a strong track record of delivering superior risk-adjusted returns over the long term.
Its disciplined contrarian investment strategy, combined with effective risk management, makes it a compelling choice for long-term investors comfortable with market volatility.
SBI Contra Fund Portfolio
As of April 2025, the SBI Contra Fund diversified portfolio reflecting its contrarian investment strategy. Here’s an overview of its holdings:
Asset Allocation
- Equity: Approximately 75.99%
- Cash & Equivalents: 10.41%
- Treasury Bills: 5.04%
- Certificates of Deposit: 4.97%
Top 10 Holdings (as of April 16, 2025)
| Holding | Sector | Allocation (%) |
|---|---|---|
| HDFC Bank Ltd. | Financial Services | 8.76% |
| Reliance Industries Ltd. | Energy | 4.24% |
| Kotak Mahindra Bank Ltd. | Financial Services | 3.29% |
| Bank of India Ltd. | Financial Services | 2.33% |
| GAIL (India) Ltd. | Energy | 2.25% |
| Torrent Power Ltd. | Energy | 2.17% |
| Dabur India Ltd. | Consumer Staples | 2.05% |
| Tech Mahindra Ltd. | Technology | 1.94% |
| Tata Steel Ltd. | Metals & Mining | 1.94% |
| State Bank of India | Financial Services | 1.87% |
These top 10 holdings collectively constitute a significant portion of the fund’s equity investments.
Sector Allocation
The fund’s sector-wise distribution is as follows:
- Private Banks: 18.02%
- Miscellaneous: 10.51%
- Public Banks: 8.36%
- Oil & Gas – Refining & Marketing: 8.21%
- Pharmaceuticals: 6.27%
Market Capitalization Breakdown
The fund’s equity investments are diversified across market capitalizations:
- Large Cap Stocks: 41.4%
- Mid Cap Stocks: 9.81%
- Small Cap Stocks: 4.82%
The SBI Contra Fund’s portfolio reflects its strategy of investing in undervalued sectors and companies with strong fundamentals, aiming for long-term capital appreciation.
SBI Contra Fund Returns
As of April 2025, the SBI Contra Fund – Regular Plan – Growth has delivered the following returns:
| Investment Period | Absolute Returns | Annualized Returns |
|---|---|---|
| 1 Year | 4.70% | 4.73% |
| 2 Years | 52.06% | 23.42% |
| 3 Years | 73.80% | 20.29% |
| 5 Years | 330.06% | 33.94% |
| 10 Years | 275.42% | 14.15% |
| Since Inception (May 6, 2005) | 1994.50% | 16.55% |
The fund has demonstrated strong long-term performance, particularly over the 5-year period, where it achieved an impressive annualized return of 33.94%. This outperformance highlights the fund’s effective contrarian investment strategy.
SBI Contra Fund – Direct Plan – Growth
As of April 18, 2025, the SBI Contra Fund – Direct Plan – Growth is an open-ended equity mutual fund managed by SBI Mutual Fund. It follows a contrarian investment strategy, focusing on undervalued stocks with strong long-term potential.
Returns Performance
| Investment Period | Absolute Returns | Annualized Returns |
|---|---|---|
| 1 Year | 5.15% | 5.15% |
| 3 Years | 77.25% | 20.94% |
| 5 Years | 365.48% | 35.99% |
| 10 Years | 321.40% | 15.46% |
| Since Inception | 557.58% | 16.56% |
SBI Contra Fund – Regular Plan – Growth
As of April 18, 2025, the SBI Contra Fund – Regular Plan – Growth is an open-ended equity mutual fund managed by SBI Mutual Fund. It follows a contrarian investment strategy, focusing on undervalued stocks with strong long-term potential.
Returns Performance
| Investment Period | Absolute Returns | Annualized Returns |
|---|---|---|
| 1 Year | 4.19% | 4.19% |
| 2 Years | 54.79% | 24.26% |
| 3 Years | 72.55% | 19.86% |
| 5 Years | 346.98% | 34.89% |
| 10 Years | 292.04% | 14.63% |
| Since Inception | 2095.11% | 16.74% |
Strengths of SBI Contra Fund
1) Strong Long-Term Returns
- Delivered robust 5-year and 10-year returns (34.89% and 14.63% CAGR respectively for the Regular Plan as of April 2025).
- Outperformed the benchmark (BSE 500 TRI) over longer horizons.
2) Experienced Fund Management
- Managed by Dinesh Balachandran, a CFA and seasoned investor with a deep contrarian approach, and Pradeep Kesavan, an experienced co-manager.
3) Contrarian Strategy
- Invests in undervalued sectors/stocks ignored by the market. This often leads to superior returns when the cycle turns in favor of those sectors.
4) Diversified Portfolio
- Exposure across large-cap, mid-cap, and small-cap companies. Balanced across private and public sector enterprises.
5) Solid Research Focus
- Backed by SBI Mutual Fund’s research-intensive process and deep sectoral knowledge.
Risks of SBI Contra Fund
1) Contrarian Bet Timing Risk
- Contrarian strategies can underperform during prolonged bull markets focused on momentum stocks.
- Requires patience and a long-term view—short-term volatility can be high.
2) Market-Linked Volatility
- High exposure to equities (~85%) means the fund is subject to overall market risk.
- Underperformance in bear phases is possible
3) Sector & Stock Concentration
- Some exposure to cyclical sectors (e.g., energy, public sector banks) can lead to higher volatility.
- A few large positions like HDFC Bank and Reliance may dominate performance.
4) High Risk – High Reward
- Categorized as “Very High Risk”. Not suitable for conservative investors or short-term goals.
5) Higher Expense Ratio (Regular Plan)
- Regular plan has a relatively higher expense ratio (~1.51%), which can eat into returns over the long run.
Suitable For:
- Long-term investors (5+ years)
- Investors comfortable with volatility
- Those seeking exposure to undervalued sectors/stocks
- Someone who can stay invested during off-cycles
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