Contra mutual fund schemes look for stocks that are either beaten up or have not run up much comparably and are available at reasonable valuation but having high potential to show a turnaround. Three mutual fund schemes - Invesco India Contra, Kotak India EQ Contra and SBI Contra Fund - now predominantly follow the contra strategy. The contra strategy is associated with long-term investing. These funds select the stocks when the economy runs into a rough phase and many of the sectors underperform. This, in turn, could help the funds to deliver better returns when the economy turns around. It is worth looking at their recent additions to their portfolio, given in the highly volatile peaking markets with strong fund flows, whereas most of the stocks are traded at rich valuations. Here are the top midcap stocks that were added by contra funds in their portfolio over the last six months. Data as of September 30, 2023. [Source: ACEMF]
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The Federal Bank Scheme that newly added the stock: SBI Contra Fund
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Voltas Scheme that newly added the stock: Kotak India EQ Contra Fund
