Fund Pick: Invesco India Contra has consistently outperformed its peers

Launched in April 2007, Invesco India Contra Fund featured in the top 30 percentile of the value/contra funds category of CRISIL Mutual Funds Ranking (CMFR) for the three quarters ended September 2019. Taher Badshah and Amit Ganatra have been managing the fund since January 2017 and August 2012, respectively. The fund’s assets under management jumped over 15 times from Rs 295 crore in November 2016 to Rs 4,486 crore in October 2019.

 

The objective of the scheme is to generate capital appreciation by investing predominantly in equity and equity-related instruments through contrarian investing.

Trailing returns

The fund has outperformed the benchmark (S&P BSE 500 TRI) in the past three-, five-, seven-, and 10-year trailing periods. It consistently outperformed peers (funds ranked under the value/contra funds category in September 2019 CMFR) in all the trailing periods under analysis. An investment of Rs 10,000 in the fund on April 11, 2007 (inception of the fund), would have grown to Rs 48,630 on November 26, 2019, at an annualised rate of 13.33 per cent, as compared to the category and the benchmark, which would have grown to Rs 47,604 (13.14 per cent per annum) and Rs 36,511 (10.79 per cent per annum), respectively. Systematic investment plan is a disciplined mode of investing offered by mutual funds through which one can invest a certain amount at regular intervals. Monthly investment of Rs 10,000 for the last decade in the fund amounting to Rs 12 lakh would have grown to Rs 25.48 lakh (14.44 per cent annualised returns) as against Rs 21.74 lakh (11.46 per cent annualised returns) in the benchmark on November 26, 2019.

Portfolio analysis

During the past three years, the fund’s portfolio has been diversified across market caps with predominant allocation to large-cap stocks (58.92 per cent on average). Mid-cap and small-cap exposure averaged 21.21 per cent and 16.6 per cent, respectively. The portfolio was diversified across 30 sectors in the past three years. Banks had the highest average allocation of 18.29 per cent followed by finance (11.64 per cent), software (11.36 per cent), auto (7.96 per cent), and petroleum products (5.86 per cent). In the past three years, Reliance Industries, HDFC Bank, ICICI Bank, VIP Industries, and Infosys have been the key contributors to the fund’s performance.