SBI Contra Fund

Introduction

SBI Contra Fund was launched on Jul 14, 1999, by SBI Mutual Fund AMC. Being an open-ended equity-oriented fund, this fund has moderately high risk and is best suitable for investors who have a long-term investment horizon(5 years or more). Under normal circumstances, your fund house will dispatch the redemption proceeds within 10 working days from the date of request receipt.

Highlights

1. The Current Net Asset Value of the SBI Contra Fund is Rs. 191.83 for its Regular plan and Rs. 202.61 for its Direct plan.

2. The trailing returns over different periods are 76.42%(1year), 16.87%(3years), 13.94%(5years), and 18.95%(since launch). Whereas, the Category returns for the same time duration are 58.39%(1year), 12.75%(3years), and 13.31%(5years).

3. The SBI Contra Fund currently holds Assets under Management(AUM) worth Rs. 2,823 Crores as of August 2021.

4. The expense ratio of the fund is 2.21% for the Regular plan and 1.49% for the Direct plan as of August 2021.

5. The exit load is 1% if the units are redeemed within 12 months from the date of allotment if the purchase is made other than through SIP.

6. Minimum investment required is Rs 5000 and the minimum additional investment is Rs 1000. The minimum SIP investment is Rs 500.

Objective & Strategy

The fund’s primary objective is to provide the investors long-term capital appreciation by investing in a diversified portfolio of equity and equity-related securities following a contrarian investment strategy. There are five sub-funds dedicated to specific investment themes like Information Technology, Pharmaceuticals, FMCG, Contrarian (investment in stocks currently out of favor), and Emerging Businesses.

Asset allocation of SBI Contra Fund

I. The asset allocation of the fund comprises around 91.14% in equities, 0.0% in debts, and 8.86% in cash & cash equivalents.
II. The top 10 equity holdings constitute around 29.80% of the assets, the top 5 sectors constitute around 17.08% of the fund’s assets.
III. The fund invests across market capitalizations around 41.7% in giant & large-cap companies, 26.42% in mid-cap, and 31.88% in small-cap companies.

Portfolio

I. No of stocks – 62.
II. Top 10 Stocks – 29.80%.
III. Top 5 Stocks – 17.08%.
IV. Price-Book(P/B) ratio – 2.60.
V. Price-Earnings(P/E) ratio – 21.07.

Top 10 stocks

I. ICICI Bank – 3.68%.
II. Tube Investments of India – 3.67%.
III. HCL Technologies – 3.43%.
IV. Carborundum Universal – 3.38%.
V. Sun Pharmaceutical Industries – 2.92%.
VI. Infosys – 2.75%.
VII. Hindustan Aeronautics – 2.68%.
VIII. Axis Bank – 2.62%.
IX. Bharti Airtel – 2.34%.
X. MTAR Technologies – 2.33%.

SBI Contra Fund Regular Growth Plan

SBI Contra Regular Plan-Growth is a Value-Oriented mutual fund scheme from SBI Mutual Fund. The fund provided returns of 79.16% in the last 1 year and since launch, it has delivered 19.10% of average annual returns. The fund has doubled the money invested in it every 2 years.

The scheme’s ability to deliver returns consistently is higher than most other funds of its category and Its ability to control losses in a falling market is high. The fund has the majority of its money invested in the Financial, Construction, Services, Energy, Automobile sectors.

Details :

I. NAV – Rs. 191.83(as of September 2021).
II. IDCW – Rs. 33.26.
III. Returns – 19.10%(since launched in July 1999).
IV. Returns per year(5 years avg) – 14.7%.
IV. Benchmark – S&P BSE 500 TRI.
V. Risk – Very High.
VI. Type – Open-ended.
VII. Asset Under Management(AUM) – Rs. 2,823 Crores(as of August 2021).
VIII. Expense ratio – 2.21%(as of August 2021).
IX. Turnover – 74%.

Minimum investment – Rs. 5000.
Minimum additional investment – Rs.1000. Lock in the period – Not applicable.
Minimum SIP investment – Rs.500. Exit load – 1% for redemption within 365 days.
Minimum no of cheque – 12.
Minimum withdrawal – Rs. 500.

SBI Contra Fund Direct Growth Plan

SBI Contra Direct Plan-Growth is also a Value-Oriented mutual fund scheme from SBI Mutual Fund. This fund has been in existence for over 8 years now as launched in January 2013. The fund’s returns for the last 1 year are 80.36% and since launch, it has delivered 15.07% of average annual returns.

The fund has doubled the money invested in it every 2 years. The scheme’s ability to deliver returns consistently is higher than most funds of its category and Its ability to control losses in a falling market is high. The fund has the majority of its money invested in the Financial, Construction, Services, Energy, Automobile sectors.

Details :

I. NAV – Rs. 202.61(as of September 2021).
II. IDCW – Rs. 42.76.
III. Returns – 15.07%(since launch in January 2013).
IV. Returns per year(5 years avg) – 15.44%.
IV. Benchmark – S&P BSE 500 TRI.
V. Risk – Very High.
VI. Type – Open-ended.
VII. Asset Under Management(AUM) – Rs. 2,823 Crores(as of August 2021).
VIII. Expense ratio – 1.49%(as of August 2021).
IX. Turnover – 74%.

Minimum investment – Rs. 5000.
Minimum additional investment – Rs.1000. Lock in the period – Not applicable.
Minimum SIP investment – Rs.500.
Minimum no of cheque – 12. Exit load – 1% for redemption within 365 days.
Minimum withdrawal – Rs. 500.

Taxation of SBI Contra Fund

1. Gains over Rs. 1 lakh are taxed at a rate of 15% (Short term Capital Gain Tax or STCG) if units are redeemed within 1 year of investment.

2. No tax is to be paid as long as you continue to hold the units.

3. Gains of more than Rs. 1 lakh will be taxed at a rate of 10% (Long term Capital Gain Tax or LTCG). Any cess/surcharge is not included.

4. For units redeemed after 1 year of investment, gains of upto Rs. 1 lakh accruing from those units in a financial year shall be exempted from tax.

Dividends

I. Dividends are added to the income of the investors and taxed according to their respective tax slabs.
II. Further, if an investor’s dividend income exceeds Rs. 5,000 in a financial year, the fund house also deducts a TDS of 10% before distributing the dividend.

Pros & Cons of SBI Contra Fund

Pros,
I. SBI Contra fund balances out the risk and volatility that comes with Small Cap and Micro Cap funds.
II. These funds provide stability of a large-cap fund. Well-established companies tend to do well in all the market cycles and smaller companies perform well in a bullish market. So, the returns of these funds are very attractive.
III. The fund has the flexibility to adapt and capitalize upon changing market conditions. This flexibility allows the scheme to be more responsive than reactive.

Cons,
I. During a crisis, when the market sentiment is dipping, large and mid-cap stocks plunge to more depths, as a result, investors suffer badly.
II. Fund has seen portfolios overlap and has become benchmark huggers.

Who should invest

The fund has not only delivered solid returns in the past but, has done it with exceptional consistency. All this means SBI Contra Fund can be a good addition to an investor’s portfolio. It is suitable for those Investors having good knowledge of macro trends and prefers to take high risk for higher returns and at the same time also prepared for moderate to high losses in their investments even if the market does well.

Risk-averse investors should avoid funds for the narrowly defined investment mandate. Instead, they should invest in multi-cap funds in expect for maximum possible gains.

Fund manager

Mr. Dinesh is currently the fund manager of SBI Contra Fund. He is a B.Tech from IIT-B, M.S from MIT USA, and CFA. Before joining SBI Funds Management Pvt. Ltd. he has worked with Fidelity Investments, USA.

Contact

Address – SBI Funds Management Ltd, 9th Floor-Crescenzo, C-38 & 39- G Block, Bandra-Kurla Complex, Bandra (East) Mumbai – 400051
Phone – 022-61793000 / 1800-425-5425
Fax – 022-22189663
E-mail – [email protected]
Website – http://www.sbimf.com

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