Invesco India Contra Fund - Growth for higher returns in longer run
Contra funds are unique when compared to other types of mutual funds. While most of the mutual funds look at investing in equity that is currently performing well, contra fund applies a different strategy in its investments. The equity which is not performing well or is underperforming is invested in, with the rationale being that they would perform well in the future. Early investment in this underperforming equity would enable to get more equity at a lesser price and yield higher returns when the equity starts performing well. A contra fund is a long term investment option as it aims at overcoming the short term fluctuations and benefit from the stability attained by the equity over a longer period of time.
Investing in Invesco India Contra Fund Growth
Invesco India Contra Fund is one of the better performing contra funds. The fund has a value oriented strategy which makes it a consistent good performer over the longer run. Invesco India Contra Fund was launched in the year 2007 as a multi cap fund which has a value bias. As is the case with Contra Funds, Invesco India Contra fund focuses on identifying and investing in equity of the companies which are currently trading below their intrinsic value or are in a phase where their value is about to increase. The ideal time frame for expected rise in the value of the stock is three period and hence this fund is good option for longer term investment. The top 10 stocks of the fund account to nearly 40-45 % of the total portfolio making it a fairly concentrated fund, however there is a long list of other equity which makes up the balance of it.
In short term period the fund seems to be lagging behind other funds, this is due to the contra fund strategy. However Invesco India Contra fund has been performing beyond the set benchmark over the last 10 years.
Source: Swaraj Wealth Research
The performance of the fund has been on the higher end with 1-year return of the fund at 41.66 % which over performs both the S&P BSE 500 bench mark and the performance of other Equity funds which provided returns of 33.88 % and 33.24% respectively. The 3-years and 5-years returns of this fund have also been higher. The three year return of this contra fund yielded a return of 16.85% which is remarkably higher than the returns of S&P BSE 500 and Equity Funds which are at 11.65 and 12.63. The 5-year performance also out performs with 22.21 % returns in comparison to 14.68 and 17.38 respectively. One of the best features about the performance of Invesco India Contra fund is the consistent good performance over a 10 year period with the returns at 13.37 % which is more than double the bench mark of S&P BSE500 which is at 6.3 and considerably higher than 9.51% of the equity funds category.
Source: Swaraj Wealth Research
Rolling fund returns provide a good measure of the actual performance of a mutual fund as it indicates the performance of the fund over the years. During the five year period of 16th Jan 2013 and 16th Jan 2018, the fund shows a return of the fund is 22.19% which is considerably higher than the 17.39% recorded by the Equity Funds category. This indicates the consistent performance and growth of the fund over the five years. The growth is consistent around 20 percent margin all through the period of five years which is an indication of the phenomenal increase of the value of fund over this period
Invesco India Contra Fund is one of the best funds to invest in if the idea is to hold the funds for a longer period of time and anticipate for higher returns.