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| Background: Launched in July 1999, Magnum Contra aims to invest in undervalued stocks, which are out of favour but have the potential to show attractive growth in the long-term. It charges an entry load of 1.75 per cent. |
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| Performance: Taking a contrarian view is tough. But the fund has done it and has been rewarded by a place in the first quartile of its category in the past two calendar years. |
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| In 2001, Magnum Contra was down just 5.52 per cent. And in 2002, it delivered a handsome return of 32.74 per cent. Overall, Magnum Contra's three-year return of 13.83 per cent per annum is way above the category average. |
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| Even recently, the fund is up 23.2 per cent on a year-to-date basis as against the benchmark BSE 100's gain of 9.94 per cent, as on July 4, 2003. |
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| Portfolio: The fund's contrarian view on petroleum and metal stocks has been hugely rewarding in recent times. This, however, was not always the case. |
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| In its early years, the fund didn't touch the IT sector and did not produce any gains. When the market tanked in 2000, the fund's PSU and other stocks were hammered severely. |
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| It was during this period that Magnum Contra made heavy investments in HPCL at the bargain basement level of Rs 140. |
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| The combination of PSU stocks without any allocation to technology has turned out to be a goldmine for the fund. In another bad year, 2001, the fund was a winner in both the bull and bear phases. |
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| The fund raked in a good performance largely on the back of its PSU holdings. When mid-caps rallied in 2002, Magnum Contra mostly stuck to large-caps. |
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| As the market moved southwards in the middle of the year, the fund's sizeable PSU allocation helped it preserve value. Though it did not gain much during the year-end rally, earlier gains were enough to help the fund end the year on a positive note. |
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| More recently, Magnum Contra has not participated in the value unlocking in PSU banks, except for SBI. Currently, the fund is bullish on auto (17.33 per cent) and metal stocks (12.52 per cent). |
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| Outlook: Magnum Contra has remained true to its label by sticking to its value theme across market conditions. A large-cap orientation has also helped it keep volatility under check. Investors looking for value orientation can opt for the fund without any hesitation. |
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| An issue of concern, however, is the single investor concentration in the fund. As on March 2003, two investors hold 68.8 per cent of the fund's assets. |
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