Investing in the stock market has become more accessible than ever, thanks to online demat accounts. One fund that has caught the attention of many investors is the SBI Contra Fund. This article will provide you with all the information you need about this fund before you opt for an open online demat account.

Fund Overview

The SBI Contra Fund, managed by the seasoned fund manager Rahul Sharma, is a value-oriented equity fund. As of September 14, 2023, the fund boasts a sizable asset under management (AUM) of ₹14,607.92 crore. The fund's primary focus is on capital appreciation, achieved by investing in stocks that are undervalued. Although the fund carries a high-risk profile, it has the potential to yield significant long-term returns, making it an option worth considering when you open an online demat account.

Investment Objective and Strategy

The cornerstone of the SBI Contra Fund's investment strategy is to focus on companies that are trading below their intrinsic value. By doing so, the fund aims to exploit market inefficiencies. This strategy has been effective in generating high returns over an extended period, making it a compelling choice for those who aim for long-term growth in their investments.

Asset Allocation

The SBI Contra Fund employs a diversified asset allocation strategy to balance risk and reward. The majority of the fund, 83.33%, is invested in equities. Within the equity segment, the fund has a balanced approach:

• Large cap stocks make up 32.98%
• Mid cap stocks constitute 17.3%
• Small cap stocks account for 14.77%

Additionally, the fund allocates 6.09% to debt instruments and 10.58% to other asset classes. This diversified approach aims to mitigate risks and optimize returns.

Performance Metrics

When it comes to performance, the SBI Contra Fund has impressive numbers to show:

• The fund has generated a 1-year return of 26.06%
• Over a 3-year period, the return stands at 37.88%
• The 5-year return is 18.85%
• Since its launch, the fund has yielded a return of 19.19%

These metrics indicate that the fund has not only performed well in the short term but has also been consistent in delivering returns over the long term.

Risks and Returns

While the SBI Contra Fund offers the prospect of high returns, it's essential to note that it comes with a high-risk profile. The fund's performance can be volatile due to market conditions, and there's a concentration of investments in a limited number of stocks. This increases the risk of loss, something investors should be aware of, especially those who are new to using an open online demat account.

Minimum Investment and Other Details

The minimum investment requirement for the SBI Contra Fund is quite accessible at ₹500. This low entry point makes it easier for a broader range of investors to participate. However, if you're considering investing in the SBI Contra Fund, consulting a financial advisor for personalized advice is highly recommended. This is especially true if you're planning to manage your investments through an open online demat account.

The SBI Contra Fund offers an attractive investment opportunity for those with a high-risk appetite. However, like any investment, it's crucial to understand the risks involved. Before making any investment decisions, especially through an open online demat account, thorough research and consultation with a financial advisor are highly recommended.