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Stop SIPs In Magnum Contra

Magnum Contra has a narrow investment mandate & has been unable to justify investments…

My investment in Magnum Contra has been faring poorly over the past 15 months; I am not sure if I should continue my SIP, stop it and stay invested or exit the fund completely and invest elsewhere?
Pravin Parulekar

This fund scheme invests in undervalued stocks, which are out of favour but have the potential to show attractive growth in long-term. The risk in such funds is the narrow investment mandate, which this fund has not been able to cash on in recent years. A multi cap fund, these require deft fund management to move across the market capitalisation spectrum.

You should definitely stop the SIPs in this fund as there are better performing funds in this category such as HDFC Equity, UTI Dividend yield or Quantum Long Term Equity that you can invest in and cut your losses. You seem emotionally attached to this investment, which is not a good sign, to have hopes in a fund that is losing steam does not augur well for your investments. Having bet on a fund that has been faring badly for sometime; you may want to initiate an STP from it to start with before completely exiting it. That you will gain from exiting this fund is a fact.

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