SBI Contra Fund is one of the best performers over the last 3 years. As of August 2023, its 3-year returns stand at an unbelievable 39% pa. As a result, the fund’s AUM has also grown from about Rs 1,300 crore to almost Rs 15,000 crore. In this video, we analyse the reasons for the fund’s outstanding performance.

Our analysis reveals that the fund’s fortunes have changed since 2020. Before that, it was a middling performer. The fund’s current fund manager, Dinesh Balachandran, started managing it only in May 2018, so the fund’s turnaround can be attributed to him.

The fund has the highest portfolio turnover ratio in the category, which shows that the fund manager likes to churn the portfolio a lot. He has also taken higher exposures to mid and small caps, which have done well over the last couple of years.

Value/contra funds, in spite of being so, often have similar holdings as plain-vanilla flexi-cap funds. Is SBI Contra Fund really contra? To check that, we saw the fund’s top bets. We found that quite a few top holdings of the fund have limited presence in flexi-cap portfolios. This tells us about the true contra nature of this fund.

Last but not least, in spite of betting on mid and small caps, the fund has managed to contain downside better than the Nifty 50. This would have surely contributed to its extraordinary performance.

Chapters
00:00 Introduction
00:50 The Secret Behind SBI Contra Fund’s Outperformance
01:15 What Are Contra Funds?
02:26 The Turnaround in Fund’s Returns
03:57 Secret Sauce of The Fun
06:44 High-Risk Investment Style, But Low-risk portfolio

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