Tata Contra Fund

Tata Contra Fund is one of the better performing funds in its category. This fund is managed by Bhupinder Sethi. Bhupinder has 16 years of experience and has been managing the fund from Feb 2011. The fund’s returns have been slightly more than the category average while its portfolio risk has been average. If you already hold units in this fund keep a watchful eye on its performance. New investors can skip the fund.

Where does Tata Contra Fund invest your money?

Tata Contra Fund is a thematic multi cap fund which means most of your money will be invested in giant, large, medium and small size companies whose stocks are out of favour at the moment but have tremendous value stored in them. Its portfolio has about 48% exposure to stocks of large cap companies, 33% exposure to stocks of mid cap companies and 16% exposure to stocks of large cap companies. The fund invests in fundamentally strong companies, which are currently undervalued due to temporary/non-recurring reasons.

Suitable for what?
  • Wealth creation
  • Lifestyle needs
Not suitable for?
  • Child's Education
  • Child's Marriage
  • Buying home
  • Retirement Planning
How much to invest?

Minimum one time investment is Rs 5000 and minimum SIP is Rs 500 per month. Do not make Tata Contra Fund as part of your core portfolio. Core portfolio is investments that are made for your basic goals and makes up about 70% of your investment portfolio. Tata Contra Fund can be part of your satellite portfolio. Do not do the mistake of investing in too many mutual fund schemes. At any point of time do not have more than two mutual fund schemes in your core portfolio.

 

 

Our recommendation for fresh investment
Not Recommended
Our recommendation for existing investment
Recommended
How has Tata Contra Fund performed in the past?

If you had invested Rs 1 lakh when the fund was launched in Oct 2005, your value of investments would be around Rs 1.83 lakhs. If you had invested Rs 1 lakh five years back it would have become Rs 1.86 lakhs. The performance has been better or similar to other mutual funds in this category. The fund has been giving at around 13% every year for those who stayed invested for last 5 years.

Assume you had invested Rs 10,000 every month in Tata Contra Fund through SIP for the past 5 years today you would have around Rs 8.64 lakhs.

How will Tata Contra Fund perform in the future?

Needless to say no one can predict the future of markets. We have firm belief in the future prospects of the Indian economy. If the Indian economy grows at 9% then the leading companies tend to do well. When the companies do well their stock prices follows their performance. So if you expect the economy to grow at 9% then you can expect top performing mutual funds to give you returns in excess of 15%. 

We advise you to avoid too much of star gazing and future prediction. Be reminded that equities are one of the asset classes that have the potential to beat inflation. Your aim for core portfolio should be to beat inflation.

When to review the performance?

Once you invest in the fund do not get into the habit of checking the NAV daily or monthly. Review the performance once a year. Too much attention is not good.

When to enter?

Now! There is no good time to invest rather than now. Do not try to time the market and especially if it is an SIP. Do not follow news channel and other experts trying to know the right time to invest. In the long run it does not matter. Mutual fund is unlike a stock where you are looking at the right price. This job will be done by the mutual fund scheme manager. If you have planned your investments and decided on the amount you want to invest do not think further, just go ahead.

When to exit?

Withdraw when your goals are closer to achievement. Do not remove the money when the markets go up or down. Do not panic. Stick to your goals.

What are the tax implications?

The returns in a mutual fund are absolutely tax free, provided you did not withdraw within 1 year. Tata Contra Fund does not qualify for sec 80C ELSS benefits.

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