Best Contra Mutual Funds in India 2026: Top 5 & Guide
What Contra mutual funds are, who should invest, key risks, and the top 5 funds with returns and risk data.
Contra mutual funds take a contrarian approach: instead of popular, high-performing stocks, the manager looks for undervalued stocks that investors may have overlooked. They suit expert, high-risk, long-term investors. This guide covers who should invest, benefits, risks, and the top 5 contra funds from our data.
Key takeaways
- Contra funds invest in currently undervalued or underperforming stocks, betting on future recovery.
- They suit expert investors with a high risk appetite and a long horizon of at least five years.
- Their results depend on estimates and on the fund manager's judgement.
- Price fluctuations are frequent, so staying calm through volatility matters.
- The top 5 funds below are ranked by an internal score, with return and risk numbers shown.
What are contra mutual funds?
A contra fund follows a contrarian approach. Rather than buying popular stocks that are already doing well, the manager looks for opportunities in stocks that are currently undervalued. The core idea is to find stocks with potential to perform well later, especially ones that other investors overlook.
Who should invest in contra mutual funds?
- High-risk investors: the funds hold underperforming stocks with growth potential, so they can be vulnerable and fluctuate.
- Long-term investors: the strategy looks forward, so it tends to reward those who stay invested for a long tenure.
What should you consider before investing?
- Tenure: these funds are expected to perform in the future, so plan to stay invested for the long term.
- Risk: volatility is high and price swings are frequent, so avoid panic when prices move.
- Expense ratio: fund charges affect your actual returns.
Advantages of contra mutual funds
- Unconventional investing: they pick underperforming assets, which can profit if the factors holding a stock back are resolved.
- Possible hedge: they can help against market corrections when the market is overvalued.
- Buy low, sell high: stocks are bought at lower prices and can rise as potential is realised.
- Lower downside risk: the portfolios trade at a discount to their past valuations.
Risks of contra mutual funds
- Based on estimations: the stocks are undervalued and are expected, not certain, to do well.
- Needs expertise: they suit investors skilled in research and analysis.
- Fund manager dependence: if equities underperform the manager's predictions, investors may face losses.
How are Contra mutual funds taxed?
Gains from Contra funds are subject to capital gains tax as equity mutual funds. The rates and holding-period rules depend on the fund type and can change, so check the current rules or speak to a tax advisor before you invest.
Top 5 Contra mutual funds ranked by an internal score
These are the top 5 Contra funds from our data, ranked by Invo Wealth's internal fund-quality score. The score itself is not shown, only the return and risk numbers behind it. A "--" means the fund has not completed that period or the data is unavailable. Some entries are different plan or option variants of the same scheme (for example Direct vs Regular, or Growth vs Bonus), so their figures can look similar.
Returns across 6 months to 5 years
Performance data as of 5 September 2026.
| Fund | 6M CAGR | 1Y CAGR | 3Y CAGR | 5Y CAGR |
|---|---|---|---|---|
| SBI CONTRA FUND - Regular Plan - IDCW | -2.68% | -0.42% | 10.69% | 15.03% |
| SBI CONTRA FUND - Regular Plan - Growth | -2.68% | -0.42% | 10.69% | 15.03% |
| Kotak Contra Fund | 3.22% | 3.13% | 14.61% | 13.30% |
| Motilal Oswal Contra Fund | -- | -- | -- | -- |
| Invesco India Contra Fund | 10.75% | 1.39% | 14.22% | 12.51% |
Risk and consistency metrics
| Fund | ISIN | Volatility | Max drawdown (3Y) | Sortino ratio |
|---|---|---|---|---|
| SBI CONTRA FUND - Regular Plan - IDCW | INF200K01347 | 15.08% | -16.17% | 0.33 |
| SBI CONTRA FUND - Regular Plan - Growth | INF200K01362 | 15.08% | -16.17% | 0.33 |
| Kotak Contra Fund | INF174K01245 | 17.51% | -19.40% | 0.59 |
| Motilal Oswal Contra Fund | INF247L01GZ9 | 13.86% | -2.69% | -- |
| Invesco India Contra Fund | INF205K01189 | 17.91% | -19.04% | 0.55 |
Because contra funds buy out-of-favour stocks, check maximum drawdown and volatility together with the longer-term CAGR figures.
How to invest in Contra mutual funds
You can invest in these funds using the Invo Wealth app. Sign up, get complete portfolio insights and start investing in mutual funds that actually suit you.
Conclusion
Contra funds back out-of-favour stocks and can reward patient, experienced investors, but results depend on estimates. Invest only if you can accept high risk and hold for the long term.
Frequently asked questions
What are contra mutual funds known for?
Contra funds invest in stocks that are underperforming or overlooked now but are expected to perform well in the future.
Who can invest in contra mutual funds?
They are meant for expert investors with a high risk appetite, since undervalued stocks can see frequent price fluctuations or fail to perform as expected.
How long should I stay invested in a contra fund?
At least five years, to see the fund perform and realise its benefits.
Can I redeem a contra fund investment at any time?
Yes, you can withdraw at any time after deducting any applicable exit load.
How can I invest in contra mutual funds?
You can invest through a SIP or a lump sum. To invest in these funds, you can use the Invo Wealth app: sign up, get portfolio insights and start investing.
Mutual fund investments are subject to market risks; read all scheme-related documents carefully. This article is for education only and is not investment advice. Past performance does not guarantee future returns. Invo Wealth is an AMFI-registered mutual fund distributor (ARN-368528).