Bandhan Mutual Fund launches a contra fund; know the key features of this fund before investing..

Bandhan Mutual Fund has launched a new fund called the Bandhan Contra Fund. It is an open-ended equity scheme that will employ a contrarian investment strategy to invest in shares of companies with strong fundamentals. This represents a distinct investment approach.

**NFO Opens on August 10**

The New Fund Offer (NFO) for the Bandhan Contra Fund will open on August 10 and close on August 24. A contrarian investment strategy involves investing in companies whose future performance the market doubts. Using this approach, the scheme will identify companies that possess good long-term growth potential but are currently trading at low share prices.

**Beneficial for Long-Term Investment**

There can be various reasons for such low share prices, including company-specific weaknesses, cyclical downturns, and negative market sentiment. This investment strategy operates on the premise that the stock price will rise once the company's fundamentals improve, leading the market to re-rate the stock. Experts state that this strategy is advantageous for long-term investors.

**Current Opportunities for Contrarian Investing**

Bandhan Mutual Fund has stated that including this scheme can strengthen traditional growth and value-oriented equity portfolios. Vishal Kapoor, CEO of the AMC, noted that valuation disparities across sectors are widening, creating opportunities for contrarian investment.

**Average Long-Term Returns Between 14-18 Percent**

Contrarian or 'contra' funds typically generate average long-term returns ranging from 14% to 18%. For instance, the SBI Contra Fund has delivered returns in the 15-18% range since its inception. Experts advise against investing in a scheme based solely on past returns. Investors should consult their financial advisor before making an investment.

Seek advice from an investment advisor before investing.

Investors should also exercise caution when investing in an NFO (New Fund Offer). If you wish to invest in the Bandhan Contra Fund, you should examine the performance of existing contra funds in the market; this will help you make an informed investment decision. A 'New Fund Offer' refers to a new scheme launched by an asset management company.

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