SBI Contra Fund — Complete Guide, Strategy, Performance & How to Invest

• Sushil Bajaj |
• 10 September 2025 |

What are Contra funds?

Contra funds are a category of equity mutual funds that have a contrarian (or value) orientation. These funds invest in companies that are temporarily undervalued, out of favour, or neglected but with strong fundamentals. The idea is to take advantage of mean reversion: buying while others are selling and holding to enjoy the recovery when the company sees its fair value assigned to it. As a result, contra funds tend to underperform during up markets (but again strong fundamentals are key!), and outperform when out of favour sectors or companies regain favour. The best uses of contra funds are for investors with a long investment horizon (5+ years) who can tolerate short-term volatility.

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Quick Snapshot — SBI Contra Fund

Particulars	Details
Scheme Name	SBI Contra Fund
Type	Open-ended Equity — Contra (Value/Contrarian)
Date of Allotment	05 July 1999
Benchmark	Nifty 500 Value 50 Total Return Index (TRI)
Fund House	SBI Mutual Fund
Minimum Investment	Lump Sum: ₹5,000; SIP: ₹500
Investment Style	Contrarian / Value-oriented, diversified across caps
Suitable For	Long-term investors seeking value-led equity exposure

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The main investment objective of the SBI Contra Fund is to achieve capital appreciation over a long-term investment horizon by investing in a diversified portfolio of equity & equity-related securities using contrarian investment framework.

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Benchmark Details

The SBI Contra Fund is benchmarked against the Nifty 500 Value 50 TRI. The benchmark itself has 50 value companies which are classified from the Nifty 500 universe using various parameters of value including low P/E, low P/B, high dividend yield and low price-to-sales ratio. Thus, it is a fair benchmark for fund comparisons as it consists of the value segment of the Indian equity market.

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Investment Style & Strategy

The SBI Contra Fund takes a value and contrarian approach.

Consider the following:

• Bottom-up stock selection process: The SBI Contra Fund focuses on the fundamental side of investing including earnings, valuations and cash flows.
• Contrarian: The SBI Contra Fund looks to invest in sectors and stocks that are out of favour but have the potential, in the long term to provide good returns.
• Diversified across market cap: The SBI Contra Fund invests primarily in large-cap stocks and also makes select investments in mid and small-cap companies.
• Active risk management: The SBI Contra Fund is actively managed to ensure that risk is balanced against the opportunity.
  Investors should also keep in mind that investing with a contrarian view could mean periods of relative underperformance when growth and momentum stocks continue to drive the market.

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Why Invest in SBI Contra Fund?

• Value Investing Opportunity: It gives you, as an investor, the opportunity to hopefully benefit from any recovery within out of favour sectors.
• Long track record: The SBI Contra Fund’s inception date is 1999 making it one of the oldest contrarian funds in Canada.
• Active Management: The fund managers have numerous years of investment experience in addition to significant research capabilities in search of value stocks.
• Diversification benefit: It provides you with a different style of investing than what you would typically find with large-cap or flexi-cap funds.

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Investment Areas — Sectors & Companies

The SBI Contra Fund invests across multiple sectors such as:

• Financial Services
• Technology
• Industrials
• Consumer Goods
• Cyclical Sectors (when valuations are attractive)

Top holdings and exact sector allocations vary over time. Therefore, investors should check the latest factsheet for updated details as on September 10, 2025.

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Historical Performance

(Performance numbers change frequently — always verify with the latest factsheet before investing)

Period	SBI Contra Fund (Annualised)	Benchmark (Nifty 500 Value 50 TRI)
1 Year
3 Years
5 Years
Since Launch

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Fees, Loads & Taxation

• Expense Ratio: Check the latest factsheet for the current TER .
• Exit Load: 1% if redeemed before 1 year .
• Taxation:
  Short-term gains (< 1 year): Taxed at 20%.
  Long-term gains (> 1 year): Tax-free up to ₹1.25 lakh; beyond that taxed at 12.5% without indexation.

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🔗 How to Invest Online?

You can easily invest through our online investment platform.

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Dealing with the pain points of investors

Should I expect a short-term loss?
Yes, contra funds can have volatility but the value cycle turns to long-term investors.

What is the best timing to get in?
Well, timing is difficult and this is why we talk about Systematic Investment Plan (SIP).

Are the fund managers reliable?
SBI Mutual Fund provides a structured process and experienced management team.

Are there any hidden costs?
No. All costs (expense ratio, exit load) are disclosed in the scheme document and factsheet.

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Q1. Is the SBI Contra Fund a good investment for SIPs?
Yes! SIPs help with rupee-cost averaging and reduce the timing impact.

Q2. What is the minimum recommended investment horizon?
At least 5 years so you can ride out any short-term underperformance.

Q3. What is the benchmark of SBI Contra Fund?
Nifty 500 Value 50 TRI.

Q4. Where can I get the latest on the portfolio?
On the SBI Mutual Fund factsheet which is published monthly.

Q5. Are SBI Contra Funds suitable for conservatives?
Not really. Contra funds have greater volatility are typically for moderately aggressive investors.

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The SBI Contra Fund is an equity fund that has operated with a value and contrarian strategy for many years. It invests in quality companies that are undervalued for reasons that are not usually justified. The SBI Contra Fund is best suited for long-term investors (with a 5 year + horizon) who are comfortable with short-term volatility and looking for a style-diversifier in their total investment portfolio.

Disclaimer:- Mutual Fund investments are subject to market risks, please read scheme related documents carefully before investing.