Value and contra funds are among the most rewarding categories of equity mutual funds for long-term investors in India. These funds follow a contrarian approach, investing in undervalued stocks that the market has overlooked. This page compares the best value and contra funds available in 2026, helping you choose the right fund based on returns, risk, expense ratio, and investment strategy.
Value and contra mutual funds follow contrarian investment strategies, buying stocks that are currently undervalued or out of favour with the broader market. Value funds look for stocks trading below their intrinsic value based on fundamental analysis, while contra funds invest against prevailing market trends. Both strategies aim to generate superior returns when the market eventually recognises the true worth of these undervalued companies. All value and contra funds in India are regulated by SEBI (Securities and Exchange Board of India) under strict guidelines.
These funds require patience as value investing may underperform during momentum-driven bull markets. However, historically, value strategies have delivered strong long-term returns. An investment horizon of 5-7 years is recommended to allow the value thesis to play out fully. You can check daily NAV updates for all value and contra funds on the AMFI (Association of Mutual Funds in India) website.
| # | Fund Name | NAV (₹) | 1Y Return ▼ | 3Y CAGR | 5Y CAGR |
|---|---|---|---|---|---|
| 1 | Quant Value Fund - Growth Option | 24.83 | +16.98% | +23.87% | — |
| 2 | LIC MF Value Fund | 30.22 | +14.59% | +17.14% | — |
| 3 | DSP Value Fund | 24.93 | +11.92% | +18.18% | +14.20% |
| 4 | Mahindra Manulife Value Fund | 12.96 | +10.81% | — | — |
| 5 | Aditya Birla Sun Life Value Fund - Growth | 154.70 | +8.81% | +17.58% | +15.59% |
| 6 | Axis Value Fund | 21.02 | +7.14% | +19.46% | — |
| 7 | HDFC Value Fund - Growth Option | 879.28 | +4.92% | +17.10% | +15.68% |
| 8 | Kotak Contra Fund | 184.55 | +3.47% | +17.62% | +16.55% |
| 9 | ITI Value Fund - Direct Plan - Growth Option | 18.93 | +3.11% | +15.35% | +13.59% |
| 10 | HSBC Value Fund | 128.99 | +2.57% | +18.81% | — |
| 11 | Groww Value Fund (formerly known as Indiabulls Value Fund) - Direct Plan - Growth Option | 33.31 | +2.48% | +15.30% | +13.72% |
| 12 | Union Value Fund - Direct Plan - Growth Option | 31.19 | +2.37% | +15.37% | +14.99% |
| 13 | Nippon India Value Fund - Direct Plan Growth Plan | 249.45 | +0.46% | +16.98% | +15.77% |
| 14 | Tata Value Fund -Direct Plan Growth Option | 398.15 | +0.15% | +14.31% | +15.58% |
| 15 | ICICI Prudential Value Fund | 512.96 | -0.20% | +15.29% | +17.10% |
| 16 | Bandhan Value Fund | 167.68 | -0.23% | +11.91% | +14.32% |
| 17 | UTI Value Fund - Direct Plan - Growth Option | 184.10 | -0.47% | +14.74% | +13.35% |
| 18 | Baroda BNP Paribas Value Fund - Direct Plan - Growth option | 14.29 | -0.57% | +10.70% | — |
| 19 | SBI CONTRA FUND | 417.04 | -1.31% | +13.69% | +16.95% |
| 20 | Templeton India Value Fund | 790.60 | -1.54% | +12.74% | +15.62% |
Data sourced from AMFI & mfapi.in. Returns are annualised CAGR. Past performance doesn't guarantee future results. Last updated: 21 Jul 2026
The tax treatment of value and contra funds follows equity mutual fund taxation rules as defined by the Income Tax Department of India. Long-term capital gains (LTCG) above Rs 1.25 lakh are taxed at 12.5%, while short-term capital gains (STCG) are taxed at 20%.
Frequently Asked Questions
What is the difference between value and contra funds?
Value funds invest in undervalued stocks based on fundamental metrics like P/E ratio, P/B ratio and dividend yield. Contra funds take a broader contrarian view, investing against prevailing market sentiments and trends.
Do value funds perform well in all markets?
Value funds may underperform during growth-driven bull markets but tend to outperform during market corrections and mean-reversion phases. They require patience and a long-term investment horizon.
Are value funds suitable for SIP?
Yes, SIP is an excellent way to invest in value funds as it allows you to accumulate units over different market phases, potentially buying more of undervalued opportunities during market downturns.
What is the minimum investment horizon for value funds?
A minimum of 5-7 years is recommended for value and contra funds. Value investing is inherently a long-term strategy and requires patience for the undervaluation thesis to materialise.
What Are Value and Contra Mutual Funds?
Value funds and contra funds both follow a contrarian investment philosophy — buying stocks that are temporarily out of favour, undervalued relative to their intrinsic worth, and overlooked by the broader market. Value funds specifically target stocks trading below their fair value based on fundamental metrics (low P/E, P/B, high dividend yield). Contra funds take positions contrary to prevailing market sentiment — buying sectors or stocks that are beaten down but have strong underlying fundamentals. SEBI classifies them as separate categories, and a fund house can offer either a value fund or a contra fund, but not both.
How Value Investing Creates Wealth
Value investing works on a simple principle: buy undervalued, sell at fair value. When the market overreacts to short-term negative news — an earnings miss, sector headwinds, or broader market panic — fundamentally strong companies get unfairly punished. Value fund managers buy these beaten-down stocks at a discount and hold patiently until the market recognises their true worth. The margin of safety (buying below intrinsic value) protects against permanent capital loss while providing significant upside when the re-rating happens.
Historically, value investing has been one of the most successful long-term strategies globally. In India, value and contra funds have delivered 13-16% CAGR over 10-year periods, with the additional characteristic of performing exceptionally well during market recoveries — when beaten-down stocks snap back, value funds often outperform growth-oriented funds by a wide margin.
Value vs Growth: Cycles and When Each Shines
Value and growth styles go through extended cycles. Growth stocks (high-growth companies with premium valuations) dominated from 2017-2021, making value funds look like chronic underperformers. Then from 2022-2024, value stocks staged a powerful comeback as rising interest rates and inflation fears punished expensive growth stocks. Neither style permanently wins — they alternate in multi-year cycles. This is why portfolio diversification across both styles (value fund + flexi cap/growth fund) delivers smoother long-term results than betting on one style.
Patience Is the Price of Admission
The biggest challenge with value and contra funds is the wait. Undervalued stocks can remain undervalued for years before re-rating. A value fund may underperform for 2-3 years while the market chases momentum — this tests investor patience severely. Many investors give up and sell right before the fund’s thesis plays out. If you invest in a value or contra fund, commit to a minimum 7-year horizon through a monthly SIP, and don’t compare quarterly performance with small cap or mid cap momentum funds. Your patience will be rewarded over complete market cycles.
How to Choose Between Value and Contra Funds
Look at the fund manager’s track record across market cycles — has the fund outperformed during at least one major recovery (2020 bounce, 2023 rally)? Check the portfolio’s valuation metrics (P/E, P/B) relative to the benchmark — they should be meaningfully lower, confirming genuine value orientation. Avoid funds that claim to be “value” but hold popular large caps at market P/E — that’s closet indexing, not value investing. Allocate 15-20% of your equity portfolio to a value/contra fund as a diversification play alongside your core index or flexi cap holding.
