Last year, it pulled off an exceptional return of 64.49 per cent to emerge as the second hottest diversified equity fund. As on September 5, 2005, this fund has raced much ahead of an average peer to deliver 53.29 per cent since the beginning of the year. This performance has resulted in the fund finding place in many of the portfolios that we receive these days. The popularity of Magnum Contra can also be gauged from its asset growth in the last year--a Rs 22-crore fund in June last year, the fund now manages Rs 558 crore.
Fund manager Sandip Sabharwal manages Magnum Contra in a relatively aggressive fashion. He does not hesitate to take high exposure to any particular stock or sector if he is convinced about it. For example, allocation to Gujarat Ambuja Cements had touched 9.51 per cent of total assets in August 2004. In the last one year, the top five holdings have enjoyed around 30 per cent allocation.
In the early years, the fund didn't touch the IT sector. As a result, it could not produce any gains in the technology driven rally of 1999 and early 2000. But when the market tanked in 2000, the fund's PSU stocks and other contrarian stocks were also hammered. In recent times, the fund has profited from its large investments in construction. Picks like IVRCL Infrastructures, Kajaria Ceramics, Nagarjuna Construction and Shree Cements have been proved highly rewarding. Select automobiles and metal stocks too have boosted the fund's returns.
Except for June 2003 when it also added Wockhardt apart from Cipla, the fund has not had much holding in the healthcare sector. It has been holding Cipla since November 2004. Similarly in the textile sector, the fund has been consistently holding only Arvind Mills since April 2004 in a sizeable quantity.
Magnum Contra is a reasonably diversified fund, which sticks to its value orientation. Most existing funds are focused either on large-cap, blue chip stocks or on mid-cap growth stocks. This fund lets you add another investing style to your portfolio.
This article was originally published on September 06, 2005.
Ask Value Research 
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
