What Are Contra Funds?

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Counterpart funds are a type of mutual fund. Contra means opposite. These funds also invest in this way. They invest in shares out of popularity. The experts who manage such funds see the potential inherent in these stocks and believe they can achieve better long-term performance. Therefore, they invest. The stocks they get are cheap and so it's not expensive. The main benefit is that counterpart funds are doing well when the market is down and ordinary popular stocks are running out of steam. At that time, contra shares gain in price and benefit the fund in general. Let's illustrate it with an example:

T A T A The Fund has generated a compound return of 13% over the last 5 years. It invests in segments such as food, beverages and the media, apart from the usual popular actions. The fund grew significantly as popular stocks dried up and counterparty shares gained momentum.

The basic philosophy of this type of investment is its investment method. The investment is made in areas that are overlooked by the market. Experts believe that the potential of particular stocks remains to be discovered. In the long run, these funds are gaining momentum.

However, this type of investment carries a significant risk. Experts can be wrong. Actions may not reach their full potential. Government policies play a major role in the performance of a particular sector. It is possible that, due to policy changes, targeted sectors will be negatively affected in the future. But in the expert hands and with a correct calculation, matching funds can be a good bet for the future.


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