Motilal Oswal Contra Fund – Is It Suitable for Long-Term Investors?

Mr. R. Venkatesh, Founder,

GuruRam Financial Services Pvt. Ltd.

Motilal Oswal Financial Services Mutual Fund has launched a new open-ended contra fund scheme called “Motilal Oswal Contra Fund.” The primary objective of this scheme is to invest in companies that are currently overlooked by the market or temporarily undervalued under the present market conditions.

The New Fund Offer (NFO) of this scheme closes on May 22, 2026. It is being viewed as an alternative opportunity for investors aiming for long-term wealth creation.

What Is a “Contra” Investment Strategy?

Generally, sectors and stocks that attract higher investor interest tend to trade at premium valuations in the market. However, at times, companies with strong fundamentals may witness price corrections due to temporary reasons.

In such situations, the contra investment approach focuses on:

·         Identifying stocks that the market currently views negatively

·         Utilizing opportunities available at lower valuations

·         Focusing on long-term growth potential

These principles form the core philosophy of contra investing.

Rather than reacting to emotional market fluctuations, this investment style emphasizes the intrinsic value and long-term strength of businesses.

 

Key Features of the Scheme

Feature	Details
Scheme Type	Open-Ended Contra Equity Fund
NFO Closing Date	May 22, 2026
Benchmark	Nifty 500 Total Return Index
Investment Style	Undervalued Stocks
Number of Stocks	Approximately 30–35 companies
Minimum Investment	₹500
SIP Starting Amount	₹500 per month
Exit Load	1% if redeemed within 365 days

 

Who Will Manage This Fund?

The scheme will be jointly managed by an experienced team of fund managers:

·         Varun Sharma

·         Balachandra Shinde

·         Ankit Agarwal

·         Rakesh Shetty

·         Swapnil Mayekar

Separate fund managers have been appointed for equity, debt, and international investments, which is considered an added strength of the scheme.

Why Are Contra Funds Gaining Attention?

Not all sectors remain market favorites at all times. Certain sectors may underperform during specific periods but can stage a strong comeback due to economic and business cycle changes.

For example:

·         Banking sector

·         Metals and manufacturing sector

·         Pharmaceutical companies

·         Information technology sector

These sectors have experienced phases of weak performance in the past but later delivered significant recoveries.

The objective of contra funds is to identify such opportunities early and benefit from their long-term potential.

Investment Approach of the Scheme

The fund is likely to focus on companies with:

·         Strong cash flows

·         Lower debt burden

·         Reasonable valuations

·         Future growth potential

·         Temporary price corrections caused by market pressure

This indicates that the scheme may follow the philosophy of investing in “good businesses available at attractive valuations.”

 

Points Investors Should Consider

Contra investing does not guarantee quick profits. In some cases, it may take years for the market to recognize and revalue such companies.

Therefore, investors should ideally:

·         Maintain an investment horizon of at least 5–7 years

·         Be prepared to handle short-term market volatility patiently

·         Avoid using this scheme for short-term financial goals

A disciplined and long-term approach is essential for this category of investment.

 

Who May Consider This Scheme?

This scheme may be suitable for investors who:

·         Aim for long-term wealth creation

·         Can tolerate market volatility patiently

·         Already have exposure to mutual fund investments

·         Are interested in value and contra investing strategies

However, investors seeking only stable and low-risk returns should carefully assess their risk tolerance before investing.

 

Final Thoughts

While many investors chase popular and trending stocks in the market, contra funds take a different path. Their core objective is to identify opportunities ignored by the market and create value over the long term.

For investors who are patient and willing to stay invested with a long-term perspective, the Motilal Oswal Contra Fund could emerge as an interesting investment opportunity.

 

For more details & Investments contact..!

Mr. R. Venkatesh, Founder,

GuruRam Financial Services Pvt. Ltd.
New No. 14, Old No. 37C, First Floor
Nathamuni Street, T Nagar, Chennai -600017

Tel. +91- 9677267889, 9677025125
Email: gururamforyou@gmail.com

https://www.gururamfinancialservices.com/index.php

ARN 265132

 

For mutual fund investments, financial planning, and life & health insurance, you can confidently approach R. Venkatesh.

Read articles written by Mr. R. Venkatesh in Nanayam Vikatan, Aval Vikatan and Vikatan.com a leading personal finance magazine https://www.vikatan.com/author/aar-vengktteess

 

Disclaimer: Mutual Fund investments are subject to market risks, read all scheme related documents carefully. The past performance of the mutual funds is not necessarily indicative of future performance of the schemes.