Amid rising market volatility and increasing rotation across sectors such as banking, real estate, metals and automobiles, Motilal Oswal Mutual Fund has launched the “Motilal Oswal Contra Fund”, a new open-ended equity scheme that will follow a contrarian investment strategy aimed at identifying companies that are temporarily out of favour but have long-term turnaround potential.
A contrarian strategy is an investing style which typically invests against prevailing market trends. Contrarian investing seeks to identify investment opportunities in companies that are currently out of market favour or undervalued temporarily, yet exhibit strong fundamentals and a turnaround potential over the long term.
By adopting a long-term investment horizon over a complete market cycle, a contrarian approach allows investors to take a differentiated market exposure, benefiting from market inefficiencies such as price-value dislocations, while enabling portfolio diversification.
The launch comes at a time when Indian equity markets are witnessing sharp style and sector rotations, with investors increasingly looking for differentiated portfolio strategies beyond momentum and popular market themes. Contra investing typically involves buying stocks or sectors that are currently under-owned, undervalued or temporarily ignored by the broader market, but which may possess strong fundamentals and long-term recovery potential.
According to the fund house, the strategy aims to capitalise on market inefficiencies and behavioural biases that often create disconnects between a company’s intrinsic value and its prevailing market price. The fund will maintain a high-conviction portfolio of around 30–35 stocks diversified across market capitalisations and sectors.
“Market mispricings often persist due to behavioural biases and structural factors, and during periods marked by volatility, a contrarian strategy helps look beyond temporarily prevailing narratives and focuses on long-term business fundamentals. The Motilal Oswal Contra Fund is designed to identify these early signals and opportunities and invest in companies with relatively
reasonable valuations. We maintain a high-conviction, actively managed exposure, diversified across market capitalisations, to benefit patient investors who are willing to stay invested over a full market cycle of three to five years, for true portfolio diversification,” said Prateek Agrawal, MD & CEO, Motilal Oswal Asset Management Company (MOAMC).
The Fund will be managed by Varun Sharma (Fund Manager – For Equity component), Bhalchandra Shinde (Fund Manager – Equity Component), Ankit Agarwal (Fund Manager – For Equity Component), Rakesh Shetty (Fund Manager – For Debt Component), and Swapnil Mayekar (Fund Manager – For Overseas Component).
The strategy can particularly appeal during periods of:
elevated valuations,
sector concentration,
market corrections,
or sharp leadership changes across industries.
The fund house noted that sectors such as:
metals,
real estate,
banking,
and automobiles
have seen changing leadership across market cycles, making diversified and differentiated exposure increasingly important for long-term investors
Under the scheme structure:
the minimum lump sum investment amount has been fixed at ₹500,
with additional investments allowed in multiples of ₹1 thereafter.
The exit load structure states:
1% exit load if redeemed within 365 days from allotment,
and no exit load after one year.
The launch also reflects a broader trend in India’s mutual fund industry where fund houses are increasingly introducing thematic, style-based and differentiated strategies to cater to evolving investor preferences. As retail participation in equities rises through SIPs and digital investing platforms, investors are gradually seeking portfolio diversification beyond traditional large-cap and index-linked products.
However, financial advisors caution that contra investing requires patience and a longer investment horizon because turnaround opportunities can take time to materialise. Such strategies may also underperform during momentum-driven rallies where already expensive sectors continue attracting capital.
Key Fund Details:
NFO Period: May 08, 2026 and closes on May 22, 2026
Investment Objective: To achieve long term capital appreciation by predominantly investing in equity and equity related instruments through contrarian strategy. However, there is no assurance that the investment objective of the scheme will be realised.
Benchmark: Nifty 500 Total Return Index
Investor Profile: This product is suitable for investors seeking capital appreciation over a long term, investing predominantly in equity or equity related investments through contrarian strategy.
Minimum application: During the NFO and on Continuous Basis: For Lumpsum: ₹ 500/- and in multiples of ₹ 1/- thereafter Additional Application Amount: ₹ 500/- and in multiples of ₹ 1/- thereafter
Exit load:
If redeemed within 365 days from the day of allotment. – 1%.
If redeemed after 365 days from the date of allotment. – Nil
Exit Load will be applicable on switch amongst the Schemes of MOMF. No Load shall be imposed for switching between Options within the Scheme.
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