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Discontinue Magnum Contra

Magnum Contra has been unable to cash in on its mandate & should not invite investments…

My investment in Magnum Contra has been faring poorly over the past 15 months. Should I continue my SIP, stay invested or exit and invest elsewhere? -Pravin Parulekar

Though this is a multi-cap fund which invests across the entire spectrum of stocks, be it large, mid or small, the mandate is narrower. This fund invests in undervalued stocks, which are out of favour but have the potential to show attractive growth over the long term. Unfortunately, the fund has not been able to cash in on this mandate over the past few years.
Where the issue of continuing your SIPs is concerned, we suggest you stop it immediately. Do not invest anymore into this fund.
Whether or not you should exit the fund right now depends on how desperately you need money. If you do not, then ensure that you sell your units only after you have held them for a year so that you do not pay any short term capital gains tax.
If you want to consider other funds within this category, take a look at HDFC Equity, UTI Dividend Yield or Quantum Long Term Equity. But do invest in them systematically and not at one go.

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