With a 1-year annualized return of 21.03%, SBI Contra Fund beat its rivals, including ICICI Prudential Value Discovery Fund, Templeton India Value Fund, IDFC Sterling Value Fund, Tata Equity PE Fund, and Nippon India Value Fund. With annualized returns of 12.75 percent over the previous six months, the fund exceeded its indicated equivalents. In addition to its current performance, the fund is performing well relative to its competitors in terms of risk ratios.
The smaller the standard deviation, the better the fund may perform and provide returns that are greater than the category average. Standard deviation is a ratio that represents the risk profile or volatility of a mutual fund’s returns. The standard deviation ratio for SBI Contra Fund is 20.07, which is lower than the category average of 20.94 and suggests lower volatility than its rivals. India Kotak Invesco Asia EQ Standard deviation ratios for Contra Fund – Direct Plan-Growth, DSP Flexi Cap Fund – Direct Plan-Growth, and Contra Fund – Direct Plan-Growth are, in that order, 21.31, 21.43, and 21.07.
A mutual fund’s relative volatility in comparison to its benchmark index is indicated by its beta ratio. The SBI Contra Fund’s beta ratio is 0.87 compared to the category average of 0.93, indicating that it is less volatile than its benchmark, the S&P BSE 500 TRI.
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The Sharpe ratio, a gauge of an investment’s return after taking into account all underlying hazards, is used to determine the risk-adjusted relative returns of the fund. SBI Contra Fund has outperformed its competitors in terms of risk-adjusted returns, as seen by its Sharpe ratio of 1.11, which is greater than the category average of 0.81. Examples are the Sharpe ratios of Invesco India Contra Fund (0.69), Kotak India EQ Contra Fund (0.64), and DSP Flexi Cap Fund (Direct Plan) (0.67).
The Capital Asset Pricing Model’s estimated market return is compared to a mutual fund scheme’s risk-adjusted return using Capital Asset Pricing Model (CAPM). The SBI Contra Fund’s standard deviation ratio is 9.17, which is greater than the category average of 2.93 and shows that the fund has outperformed market expectations for returns. Its competitors, with the exception of SBI Contra Fund, have underperformed the market in terms of all risk measures. For example, Invesco India Contra Fund has a Jensen’s Alpha ratio of 0.2, Kotak India EQ Contra Fund has a Jensen’s Alpha ratio of -0.59, and DSP Flexi Cap Fund – Direct Plan-Growth has a Jensen’s Alpha ratio of 0.18.
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