Magnum Contra has consistently managed to stay ahead of the curve.
The fund outperformed the category in every quarter since the start of 2003. When the market rises, this one rises higher than the average peer and when the market slips, it tends to fall much less than the category as well.
It emerged as the second and third best fund in 2004 and 2005 and was pretty impressive last year too. But don’t get misled by the name. When it was true to its calling, its stock picks and sector moves made it an awfully bold choice. But somewhere down the road it shed its contrarian image. But fans of this strategy should not despair. The fund still displays flashes of it.
The fund’s moderate stance in technology and financial services, is a case in point. Or it’s significant holding of metal stocks. The fund manager maintained a status quo on auto holdings when the tide turned against the sector after the first interest rate hike in December 2006. And only in May this year was there refreshed activity here. But the fund played it safe by sticking to Tata Motors and Maruti Udyog.
However, we don’t see it as a sign that it has run out of gas. The fund has struck a fine balance between riding on consensus sectors and taking contrarian bets.While still holding on to its multi-cap orientation, the portfolio has expanded from 31 odd scrips to 57. As long as the fund manager finds value, he continues to hold them.
Given its dynamic asset management strategy and robust track record, we think that this is a topnotch pick. Despite the fact that its contrarian aspirations have been tempered down, finding a place for this fund in one’s portfolio would be a worthwhile effort.
Content Guide
