SBI Contra Fund - Direct Growth

Basic Details of the SBI Contra Fund:

SBI Contra Fund currently has an AUM of Rs. 4,584.19 Cr, since its inception in January 2013. Mr. Dinesh Balachandran has managed the fund from May 2018 to the present. S&P BSE 500 TRI benchmarks the SBI Contra Fund. The Expense ratio of the SBI Contra Fund is 1.28% which is a little higher for a direct mode investment, and the current NAV of the fund is INR. 205.49. Exit load of the fund is 1% if withdrawn before 1 year and 0% after 1 year.

About Contra Investment Strategy:

A Contra fund invests in stocks that are currently underperforming due to short-term issues but have good growth potential in the medium to long term. The contra investment strategy's idea is to purchase quality stocks at lower prices and book higher profits.

Minimum Investment Details

The Minimum initial lump sum amount to be invested in the fund is Rs.5,000/. The minimum additional purchase amount is Rs. 1000/- and the minimum SIP Amount is Rs.500/-

Market caps, Stocks, and Sectors:

SBI Contra Fund currently has 21.05% invested in giant companies, 34.51% invested in large-cap funds, 20.42% invested in mid-cap companies, 17.08% invested in small-caps, and 6.94% in micro-cap companies.

The top 5 sectors in the portfolio comprises of Financial Services - 20.77%, Consumer Cyclical - 15.13%, Industrials - 14.51%, Basic Materials - 11.80%, Utilities - 9.16% contributing a total of 71.37%.

Out of the total of 64 stocks in the portfolio, the top 5 stocks are ICICI Bank - 2.85%, GAIL - 2.75%, Tube Investments - 2.60%, HCL Technologies - 2.43%, Bandhan Bank - 2.42%.

Thus the portfolio is well diversified across market caps, sectors, and stocks.

SBI Contra Fund Performance & Risk Profile:

Diversified Investments; Very Low Concentration of Stocks:

SBICF has diversified its investments, i.e., the top holding ICICI Bank's allocation in the portfolio is only about 2.85%, the top 10 stocks allocation is at 23.43%, and the remaining 54 stocks holding in the portfolio is at 76.57%. Thereby the investors of SBICF can capture decent returns from the increase in the stock prices at the mid-portion of the portfolio as well.

Similar Volatility as its Index and Good Risk-Return Ratios:

As shown above, the fund can successfully deliver stable returns to its investors over the years. The fund has a standard deviation of 23.62%, while its index S&P BSE Large Midcap TRI's standard deviation is at 21.81%, and the 3-year Sharpe ratio of SBICF is at 0.82, better than its benchmark S&P BSE Large Midcap TRI.

Recommendation:

We recommend equity mutual fund investors accumulate the units of the fund due to its ability to give stable returns to its investors with comparatively similar standard deviation and higher risk-return ratios than its benchmark.

ATS believes a client should be well informed and educated 360 degrees on the aspects of investments.

For detailed financial planning, funds recommendation, and portfolio management services, please write to us at research@adityatrading.com

To read more posts from ATS, check our blog at https://adityatrading.in/mutual-funds/