Mumbai News, 26 February 2026: The SBI Mutual Fund’s Contra Fund (Direct Plan) is an equity scheme known for providing long-term capital growth by investing against prevailing market trends. Over the past 13 years, this scheme has consistently delivered returns to investors. Its contrarian strategy allows it to identify good opportunities and invest in undervalued companies when the market is down. Currently, in terms of AUM, this scheme is leading among large contra funds.
Fund Manager:
The fund manager of this scheme is Mr Dinesh Balachandran. He has been managing this scheme since May 2018. He is assisted by Pradeep Kesavan (since November 2023). The experience of Dinesh Balachandran and his value-based investment approach are behind the success of this scheme.
Investment Goal:
The primary investment objective of this scheme is to provide investors with an opportunity for long-term capital growth. To achieve this, a diversified portfolio is created based on a contrarian investment strategy, contrary to prevailing market sentiments. At least 65% of the investments will be in equities and equity-related securities aligned with the contrarian theme, while the remaining 35% may be invested in other equities, debt or money market instruments.
AUM & NAV Today:
As of 31 January 2026, the scheme’s AUM stands at ₹48,729.33 crore. The NAV was recorded at ₹430.91 on 25 February 2026 (according to some sources, between ₹428.68 and ₹429.95 on 24 February). These figures indicate steady growth of the scheme and reflect investor confidence.
Expense Ratio:
The expense ratio of the direct plan is 0.71% (as of 31 January 2026). This low-cost structure is a major strength of the direct plan, allowing investors to receive higher net returns. It has lower commission and expenses compared to the regular plan.
Risk Factors:
This scheme falls under the Very High risk category (Riskometer: Very High). The main risk factors:
- High volatility in the market and equity market risk
- Contrarian strategy led to temporary underperformance during market trend reversals
- Sectoral or stock concentration risk
- Liquidity risk (redemption may be limited in case of large redemptions)
- Currency and political risk in case of use of foreign securities or derivatives
- Investors should invest considering their risk tolerance, age, and financial goals. Past returns do not guarantee future performance.
Approach:
The contrarian investment approach is the core of this scheme. It involves capitalizing on opportunities when the market rejects or considers a stock or sector undervalued. The fund management team uses top-down (macro-economic trends) and bottom-up (company-specific fundamentals) analysis. The portfolio includes sectors such as financial services (24.41%), oil and gas (11%), healthcare (8%), IT (8.84%), among others. The use of derivatives is permitted up to 50%.
Inception Date:
The original scheme was launched on 5 July 1999. The direct plan has been available since 1 January 2013. Over the past 13 years, this scheme has traversed several market cycles.
Returns to investors:
The long-term performance of this scheme is effective (according to the latest available data, Direct Growth Plan):
- 1 year: 7.71% (impact of recent market decline)
- 3 years (CAGR): 21.1%
- 5 years (CAGR): 23.89%
- Since inauguration (CAGR): 16.3%
This data surpasses the BSE 500 TRI benchmark. The scheme has outperformed the benchmark over 3-year and 5-year periods. For SIP investors, this scheme maintains a good growth track record over the long term.
Taxation:
Taxation system (as an equity-oriented fund):
Redemption within 1 year (STCG): 20% tax
After 1 year (LTCG): 12.5% tax on profits exceeding ₹1.25 lakh in a financial year (without indexation)
Top Holdings (up to 31 January 2026):
- HDFC Bank Ltd.: 7.71%
- Reliance Industries Ltd.: 5.65%
- Biocon Ltd.: 3.02%
- Punjab National Bank: 2.98%
- Tata Steel Ltd.: 2.94%
- Kotak Mahindra Bank Ltd.: 2.68%
Other major holdings include State Bank of India, FSN E-Commerce, among others. The portfolio consists of over 90% equity.
Conclusion:
The SBI Contra Fund Direct Plan is an excellent option for investors who are willing to take risks and are prepared for long-term investment. The contrarian strategy performs well during market volatility. However, consult your financial advisor before making any investment and maintain a horizon of at least 5-7 years. Past returns do not guarantee future performance. For more information, refer to sbimf.com or official platforms.
Disclaimer:
NiftySharePrice.com stock market news is based on publicly available authentic data sources like NSE – BSE and SEBI-authorized brokers & analysts only. Investing in the stock market involves risk. So, do your own research and consult your authorized advisors before investing.
