Value and contra funds disappoint investors, fail to beat benchmark returns

Market observers also attribute the underperformance of value and contra funds to the polarised market conditions

Mutual fund (MF) investors who have made allocations to value and contra funds are yet to see meaningful outperformance on their investments. According to data from Value Research, 13 of 15 such schemes have failed to beat the benchmark returns over a three-year period.

Industry experts say the value calls may take more time to play out, given certain sectors are facing structural challenges rather than short-term issues. “With some sectors going through long-term structural issues, some schemes may have got stuck with value-traps. Value and contra funds typically look for tactical opportunities in companies where concerns are more short-term in