A contrarian fund

FUND PICK: Magnum Contra Fund

Magnum Contra can add value to your portfolio.

Magnum Contra was launched in July 1999. The fund charges an entry load of 2.25 per cent for investments up to Rs 5 crore.

The fund takes contrarian bets on stocks. It picks stocks that have potential for appreciation but are undervalued.

Last year, it pulled off returns of 64.49 per cent to emerge as the second-hottest diversified equity fund. The fund has raced ahead of an average peer to deliver 23.53 per cent since the beginning of the year (as on July 7, 2005).

The popularity of the scheme can be gauged from its asset growth in the last year "� the fund which handled Rs 22 crore in June last year now manages Rs 349 crore.

Fund manager Sandip Sabharwal does not hesitate to take high exposure to any particular stock or sector if he is convinced about its prospects. For example, the fund's allocation to Gujarat Ambuja touched 9.51 per cent of total assets in August 2004. In the last one year, its top five holdings have been enjoying 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. Select automobiles and metal stocks, too, have boosted the fund's returns.

Except for June 2003 when it added Wockhardt apart from Cipla, the fund has not had much holding in the healthcare sector. Similarly in the textile sector, the fund has been holding only Arvind Mills since April 2004 in a sizeable quantity. 
 

Top holdings
As on June 30, 2005	Value  (Cr)	Net  Assets  (%)
Zee Telefilms	27.84	7.98
Mahindra & Mahindra	25.95	7.43
Bhel	23.36	6.69
Cipla	19.98	5.72
Bajaj Auto	19.23	5.51
ACC	17.76	5.09
Ballarpur Inds.	14.89	4.27
Welspun-Gujarat Stahl Rohren	14.44	4.14
Arvind Mills	14.22	4.07
Hindustan Zinc	13.60	3.90
Gujarat Ambuja Cements	13.39	3.84
Crompton Greaves	13.27	3.80
IVRCL	12.88	3.69
Nagarjuna Construction	11.75	3.37
Jai Prakash Associates	11.29	3.23
Praj Industries	10.59	3.03
KEC International	10.03	2.87
Shree Cement	9.85	2.82
Wockhardt	8.82	2.53
Infosys Technologies	8.61	2.47

Magnum Contra is a diversified fund which sticks to its value orientation. It can add value to your portfolio.

"� Value Research

Returns in % as on August 4, 2005

FMCG funds continued to lead equity category averages for the past year. They returned 84.11 per cent during the period.
 

Equity funds Average category returns (%)
	1 month	1 year
FMCG	10.7	84.11
Banking	14.81	82.04
Tax Planning	11.29	76.22
Diversified	10.12	64.44
Auto	8.29	54.65
Technology	4.53	51.81
Index	6.92	50.2
Pharma	5.02	45.59
Petroleum	4.83	24.47

Banking sector funds came second with annual returns of 82.04 per cent. However, on an weekly basis banking sector funds were the leaders with returns of 14.81 per cent. 

Leaders Diversified funds
	1 month	1 year
SBI Magnum Global	13.60	111.20
SBI Mag Sec Umbrella - Contra	13.03	104.77
Reliance Growth	13.30	100.81
SBI Magnum Multiplier	16.19	96.95
Sundaram Select Midcap	11.50	89.56
Franklin India Prima Fund	12.06	87.93
Alliance Equity Fund	9.51	83.92
Tata Growth Fund	12.72	82.03
ING Vysya Select Stocks	11.71	78.54
DSP ML Equity Fund	12.66	77.04

Diversified funds managed average yearly returns of 64.44 per cent. More than 85 per cent of diversified funds outperformed the benchmark Sensex returns at 50.84. 

Laggards Diversified funds
	1 month	1 year
Principal Global Opp.	8.00	8.95
LIC Equity Fund	10.69	36.96
Deutsche Alpha Equity	7.08	45.37
Deutsche Investment Opp.	6.72	45.78
UTI Mastershare	7.36	46.07
Sahara Growth Fund	9.80	46.46
LIC MF Growth Fund	13.8	47.16
UTI Index Select Fund	8.59	48.30
UTI Masterplus Unit Scheme 91	8.88	48.50
UTI Master Growth	8.87	48.87
Source: www.mutualfundsindia.com

Two schemes from SBI Mutual Fund "� SBI Magnum Global (111.20 per cent) and Magnum Sector Umbrella "� Contra (104.77 per cent) "� were the top performers on an annual basis.