Value and Contra Mutual Funds

The difference is the strategy each must follow. The share rule is the same for both.

A mutual fund is a pool of money from many people, invested by a professional manager under SEBI rules. SEBI is India's markets regulator. It sorts funds into categories, which are labels for what a fund may hold. Value and contra are two separate categories, each with its own rule:

• A value fund must follow a value investment strategy and keep at least 80% in equity, meaning shares of companies.
• A contra fund must follow a contrarian investment strategy and also keep at least 80% in equity.

Both 80% floors have applied since 26 February 2026. They come from SEBI's circular of that date, now part of its Master Circular of 20 March 2026.

SEBI names each strategy but does not define it. Each fund explains its own method in its scheme information document, the fund's official description.

In plain words, Koshex reads the two like this. A value fund looks for shares the manager judges to be priced below what the business is worth. A contra fund buys what the market is currently avoiding. That is our reading, not SEBI's definition.

Neither rule sets a company size. Size is measured by market capitalisation (market cap): the share price times the number of shares. AMFI, the fund industry body, ranks every listed company by it. Ranks 1 to 100 are large cap, 101 to 250 mid cap, and 251 onwards small cap. On AMFI's list for the six months to 30 June 2026, GAIL (India) was 100th and Bosch 101st. A value or contra fund may hold companies of any of these sizes.

Why one page for two categories? They share the same 80% floor, the same equity tax and the same Very High riskometer reading on 29 September 2026. The fund table on this page lists both together.

Yes, a fund house, the company that runs the funds, may offer one value fund and one contra fund. The condition is that their portfolios overlap by at most 50%.

SEBI's general rule is one scheme (SEBI's word for a fund) per category for each fund house. There are three exceptions:

• index funds or ETFs (exchange traded funds, whose units trade on a stock exchange) that track different indices (an index is a list of companies picked by fixed rules);
• fund of funds, which invest in other funds, with different underlying schemes;
• sectoral or thematic funds in different sectors or themes.

Value and contra count as two categories. So a fund house may have one value fund, one contra fund, or one of each.

A portfolio is the full list of what a fund holds. Overlap is the share of holdings the two lists have in common. At most 50% means no more than half of the two portfolios can be the same holdings.

You may read elsewhere that a fund house must pick one or the other. Under the rules in force since 26 February 2026, that is wrong. It may run both, within the 50% limit.

No: every listed value and contra fund read Very High on the riskometer on 29 September 2026.

The riskometer is the risk label SEBI makes every fund show. It has six levels: Low, Low to Moderate, Moderate, Moderately High, High and Very High. It is checked every month, and a fund's level can change.

The level comes from a formula. Each share is scored on company size, on how much its price swings day to day, and on impact cost. Impact cost is the extra cost of buying or selling a large amount in one go. A large cap share scores 5, a mid cap 7 and a small cap 9. Every share scores at least 5 on each measure. So a fund fully invested in shares is High at best, and usually Very High. A value or contrarian style does not change that arithmetic.

Share prices can fall hard. The NIFTY 50 is an index of 50 companies whose combined value is tracked every day. The NIFTY 50 fell 59.9% between 8 January and 27 October 2008. It fell 38.4% between 14 January and 23 March 2020. Both are price-index figures from NSE Indices, excluding dividends.

Put in rupees: if ₹2,00,000 fell 59.9%, it would be worth ₹80,200 for a while. A fund that holds shares can see a fall of that kind.

Koshex suggests a horizon of 5 to 7 years for these funds. That is our suggestion, not a SEBI rule. It is not a promise that the money recovers in that time.

These funds fit money that can stay invested for 5 to 7 years, which is Koshex's suggestion.

They also fit someone at ease with either style, as Koshex reads them. That means holding shares the manager judges to be priced below what the business is worth, or what the market is currently avoiding.

They do not fit money you need soon, such as a college fee due next June. A fall like the ones above could hit just before you pay it.

There is no lock-in, a period during which you cannot sell at all. When you sell, the fund must by rule pay you within 3 working days. Each scheme sets its own exit load, a fee some funds charge if you sell within a set time after buying. Check it on the fund's page.

Koshex is a distributor, a registered intermediary (AMFI registration ARN-154632) that helps you buy and manage funds. When markets fall sharply, we talk it through with you before you redeem, or sell your units.

Gains are taxed as equity gains if the fund keeps at least 65% in shares of Indian listed companies. That 65% is measured as a yearly average of monthly figures. It is a tax test under the Income-tax Act, 2025, in force from 1 April 2026. It is separate from SEBI's 80% rule.

A unit is one share of a fund. Your holding period is how long you owned a unit, from the day you bought it to the day you sell. It decides the rate:

• Short-term capital gain (held 12 months or less): taxed at 20%.
• Long-term capital gain (held longer): taxed at 12.5%, only on the part above ₹1,25,000 in a tax year.

That ₹1,25,000 allowance is one limit across all your equity funds. It is not a separate limit for each fund.

A worked example, with assumed gains. Suppose in one tax year you sell value fund units for a long-term gain of ₹95,000. You also sell contra fund units for a long-term gain of ₹1,10,000. You have no other long-term equity gains. Together that is ₹2,05,000. Take off the ₹1,25,000 allowance and ₹80,000 is taxable. At 12.5%, the tax is ₹10,000. Add 4% Health and Education Cess, ₹400, for ₹10,400 in total. That is before any surcharge, an extra charge added to the tax when total income is above ₹50 lakh.

Now suppose you had sold the value fund units within 12 months. That ₹95,000 would be short-term, taxed at 20% with no allowance: ₹19,000, plus ₹760 cess, or ₹19,760.

No TDS (tax deducted at source, before money reaches you) is taken from a resident's gains on selling units. IDCW is different. IDCW is a payout from the fund's income or gains, and it lowers the NAV, the price of one unit, by the amount paid. It is taxed at your slab rate, the normal income-tax rate on your income. A 10% TDS applies to IDCW above ₹10,000. That TDS is credited against your tax for the year, and any excess comes back as a refund. The growth option pays nothing out.

These funds give no deduction under section 123 (the old Section 80C). That deduction is for ELSS, the tax-saving equity funds, and only under the old tax regime.

Start by checking whether each fund is a value fund or a contra fund, because the table holds both. SEBI requires a scheme's name to match its category, so the name tells you.

Then work through these:

• Returns. CAGR is the average yearly growth over a period, as if the fund grew at the same pace every year. Compare a fund's 3-year CAGR with the category average of 3.3%, and its 5-year CAGR with 10.4%. Of the 27 listed funds, 23 have a 3-year record and are ranked.
• Size. AUM (assets under management) is the current value of the money a fund manages. The listed funds hold ₹2,17,892 Cr between them.
• Cost. The expense ratio is the fund's yearly fee, shown as a share of your money and taken from the fund's value. By law, an actively managed equity fund may charge a base fee of up to 2.10% a year on its first ₹500 crore. The table shows what each fund actually charges.
• Risk. Check each fund's riskometer level in the table.
• Method. Read how the fund describes its own strategy in its scheme information document.

Koshex sells the regular plan, the version bought through a distributor. We help you choose a fund that suits your goal and timeline. After that, we review your holdings and flag changes, such as a fund's category, risk or ranking shifting.

How much fits depends on how long the money can stay, what you already hold and how long you could wait through a weak spell. A SIP, a fixed amount invested at regular intervals, suits money that arrives monthly, like a salary.

SEBI defines these two categories by a strategy rather than by company size. Koshex suggests seeing one as a fund beside a broader fund, such as a flexi cap fund, rather than as your only equity fund. If you want a short list of shares instead of a set style, compare focused funds, which hold at most 30 stocks.

A SIP usually runs monthly. Each instalment buys units at that day's NAV. A lumpsum means investing a larger amount at one time. It suits money already in hand, like a Diwali bonus.

With a SIP, each instalment has its own holding period for tax. Say you started a SIP in May 2026. An instalment bought in May 2026 and sold in March 2027 is short-term, taxed at 20%. Only instalments held longer than 12 months count as long-term.