Equity Fund Categories
Value & Contra Funds
Style funds buying undervalued or out-of-favour stocks.
Updated 30 September 2026 · SEBI rules as of 2026
SEBI mandate
≥ 65% equity with value / contrarian strategy
Equity Fund CategoriesOverview
Value funds buy stocks trading below intrinsic value; contra funds take positions against prevailing market sentiment. Both keep at least 65% in equity. Style cycles can be long, so patience matters.
| Particular | Details |
|---|---|
| SEBI mandate | ≥ 65% equity with value / contrarian strategy |
| Riskometer (typical) | Very High |
| Suggested horizon | 7+ years |
| Tax | Equity: STCG 20% (< 12 m); LTCG 12.5% above ₹1.25 lakh a year |
| Benchmark | Relevant total-return index (TRI) |
Who should invest
- Patient investors diversifying by style
- Those comfortable with long periods of underperformance
What to check before choosing
| Parameter | Why it matters |
|---|---|
| Rolling returns | 3- and 5-year rolling returns vs benchmark and category |
| Consistency | Percentage of periods the fund beat its benchmark |
| Downside capture | How much it falls when the market falls |
| Expense ratio | Direct plans cost less than regular plans |
| Portfolio | Concentration, top holdings, sector tilt |
| Fund manager | Tenure and process |
| AUM | Very large AUM can hurt small/mid-cap agility |
Risks
- Equity market volatility — NAV can fall sharply in the short term
- Category and style cycles (e.g. small caps can underperform for years)
- Fund-manager or process risk
- Liquidity risk in smaller stocks during sell-offs
Plan your investment
Mutual fund investments are subject to market risks; read all scheme-related documents carefully. Information is educational and may change with SEBI / tax rules — verify with the AMC, AMFI or SEBI. FinancePortal is not an investment adviser.