SBI Contra Fund: The Ultimate Guide For Long-Term Gains

Do you know that you can capitalize on overlooked stocks that have strong growth potential? Yes, by investing in the SBI Contra Fund, offered by SBI (State Bank of India), you can get higher growth due to its unique contrarian investment strategy of buying undervalued stocks before the market recognizes their true worth.

These mutual funds have delivered a long-term CAGR of around 16.6% since inception and currently manage assets worth Rs 46,947 crore (AUM) as of August 2025, while offering diversification.

So, are you ready to explore the SBI Contra Fund and its investment strategy in detail? Dive deep to explore how to invest in them, their benefits and suitability for investors.

What is the SBI Contra Fund?

Designed to follow a contra investment strategy and offered by the SBI , the SBI Contra fund is an open-ended equity mutual fund established by SBI Mutual Fund.

The contra strategy is to invest in stocks or capital that are currently undervalued in the market, with a belief that these stocks will show good performance.

These funds mainly focus on identifying companies that may be currently underrated due to market factors but are fundamentally strong. It encourages investors to make regular contributions to achieve capital appreciation from this contrarian approach in the long term.

This mutual fund invests in multiple segments and securities to provide investors with diversification and help them manage risks effectively. The latest closing NAV as of 20 June 2025 for SBI Contra Fund Regular Plan Growth is Rs. 379.4813. The AUM of this mutual fund is Rs 45495.71 Crore.

Investment Strategy of SBI Contra Fund

The SBI Contra Fund has a different technique for investing, which is by looking for stocks that are underrated and not getting much recognition from the market.

The goal of this fund is to invest in these unknown stocks in the belief that they will rebound over time while providing growth in the long term through investments in different sectors.

The strategy is to get good returns while also saving from losses, as the fund has shown it can do well during challenging market conditions. The historical performance of the fund has demonstrated that it can do well during challenging market conditions.

By including multiple schemes of large, mid and small cap mutual funds, this works to balance risk and potential returns, making it a great opportunity for investors wanting to find growth in the stock market.

How to Invest in SBI Contra Fund?

Go through the step-by-step guide given below to learn how to make your first investment in the SBI Contra fund:

Step 1: Study the fund’s goals, investment style and associated risks. Review the past performance, expense ratio and other details to ensure that they meet your investment goals.

Step 2: For investing in mutual funds, you need to complete the KYC process, which includes:

• Fill out the KYC application form.
• Providing identity proof like an Aadhaar card.
• Give the address proof, like bills.
• Submit a passport-sized photo.

Step 3: You can invest in this mutual fund through two primary methods:

• Lump-sum Investment Plan: Investing a significant amount in the fund at once.
• SIP– Systematic Investment Plan: Invest a fixed amount regularly, that is, monthly, quarterly, etc.

Step 4: Investment methods in the SBI Contra Fund include:

• Online Investment: Visit the official website & create an account. Select a fund & investment method that suits you, enter the amount and make the payment.
• Offline Investment: Visit an SBI branch and get an application form. Please fill out the form and then submit it along with the other required documents.

Step 5: Review the performance of your investment regularly and accordingly adjust your portfolio to ensure its alignment with your investment goals.

Benefits of Investing in the SBI Contra Fund

The advantages of investing in the SBI Contra Fund for 2025 are:

Higher Growth

This mutual fund invests in undervalued stocks but has the potential for higher returns during market retracements, providing benefits to investors with recovery prices.

Diversification

By investing in a fusion of large, mid & small cap stocks, the fund helps reduce the risks of depending on any single stock. This fusion can improve overall returns while maintaining stability.

Good Management

Managed by Dinesh Balachandran, this fund benefits from professional perception and decision-making. He has solid experience in the finance sector, which helps direct the fund in the right direction.

Long-term Capital

This fund is highly suitable for investors with a long-term perspective for investment, dealing with market irregularities and increasing the consistency of the returns.

Tax Efficiency

If you keep your investments for over a year, you can benefit from lower long-term capital gains tax instead of higher short-term rates, making it a great investment option.

Risk Management

The fund aims to invest in companies with strong fundamentals that can help protect against market irregularities, reducing the overall risk in the portfolio.

Who Should Invest in the SBI Contra Fund?

The following are the main elements that affect the SBI Contra Fund’s suitability:

• Investor Profile Risk Tolerance: It is appropriate for investors who are willing to put up with a high degree of market irregularities & possible short-term losses in exchange for the success of larger long-term returns.

• Investment Horizon: It is advised for investors who have a long investment perspective, preferably 3 to 5 years, giving the fund more time to profit from its contrarian investment approach.

• Capital Appreciation: Investors looking for long-term capital growth for quick profits are the target audience for the SBI Contra Fund. For people who want to increase their wealth over time, it is perfect.
• Investor Profile Risk Tolerance: The fund is suitable for investors who are prepared to endure a high level of market irregularities & potential short-term losses for higher long-term growth.

• Investment Horizon: Investors with a long investment perspective (at least 3 to 5 years) are advised to consider it, as it gives more time to benefit more from the contrarian investment strategy

• Investment Goals Capital Appreciation: The SBI Contra Mutual Fund targets investors seeking long-term capital growth rather than short-term gains.

Conclusion

In short, the SBI Contra Fund is an excellent option for those who want to grow their money over a long duration. It contains a strong track record, a fusion of investments and a skilled and experienced management team, making it a good choice for those who can handle risks.

If you are considering a regular investment approach, a Systematic Investment Plan SIP could work well for you. If you are after growth and can handle the risks, this fund might be an excellent opportunity for your investments.