Contra Mutual Funds – A Way of Investing
Contra Mutual Funds – An Introduction
There are fund managers that go for different investing styles for achieving investment objective of the particular scheme. Out of everything, the contrarian style of investing interest’s investor(s). If the risks are high, this investing style offers the investor(s) an opportunity to earn magnificent returns. Let’s elaborate more about Contra Mutual Funds. Here:
Contra Mutual Funds – Who are You?
A Contra Fund is considered as against the wind kind of investment style. The funds invest in the under-performing or depressed shares at that point in time. This is basically an equity fund, which takes a contrarian view of the market. The fund manager of these funds picks the underperforming stocks and sector which may perform well in the long run. The general belief among these fund managers is that herd mentality of the investor has led to mispricing of assets, which will pick up steam in the long run as well as create opportunities for investors to generate greater returns soon. The fund manager keeps a strong watch on the market to identify those under performing stocks which have great potential to grow in the future. The underlying ideology behind investing in contra funds is that, once the immediate concerns are mitigated, the asset will go back to the real value.
Furthermore, you can read a bit here: https://www.gulaq.com/contra-funds-a-divergent-way-of-investing/
Who Should Invest?
We know that investment is all about being patient; similarly, investment in contra funds requires a bit more patience. Reason being, contra funds invest in stocks that under perform for several reasons. Therefore, investor(s) need to wait till the reasons fade away & stocks starts performing in a profitable manner. Generally, in the short-term, the risks involved with investing in a Contra Fund are bit higher as compared to investing in other companies.
Factors to Consider
- The possibility of losses is there
- The performance of market is irrelevant
- Always research the fund manager
Top 3 Contra Mutual Funds by Gulaq Methodology. Here:
Looking to invest? Hop on to gulaq.com and start investing in direct mutual funds. Furthermore, you can also get in touch: [email protected] or Whatsapp +91-9818894632
*Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.