ING Vysya contrarian fund targets 120 scrips

ING Vysya has launched a fund dedicated exclusively to the scrips which could not match the pace in the current bull run.

The company has identified around 120 scrips which have been underperforming the market and plans to take up long term positions in about a third of them for around a year. Earlier Kotak and Chola have made similar forays.

"We believe that owing to the high levels at which markets are operating, the flushing out of value will be faster," said Paras Adenwala, chief investment officer, ING Vysya.

Adenwala has identified sectors such as fertilisers, textiles and stocks such as Tata teleservices as those with the greatest medium and long term potential.

"There are industries and stocks which are not generating good profits owing to temporary factors such as regulatory hurdles, demand-supply cycles and capital expenditure," he said.

Adenwala said the number of investment-worthy stocks in the Indian capital markets had risen three times over the last two to three years, giving scope for contrarian funds to come into play.

"We need to invest in around 35 to 40 companies and with around 40 per cent of the best 300 stocks under-performing, it gives us a field of 100 to 120 scrips," he said.

Stocks such as Jet Airways, Tata Teleservices and MTNL are going through the intense capital expenditure phases, Adenwala pointed out. TVS Motor, Ranbaxy and Zee Telefilms are also good contrarian picks, he said.

The fund, with an ideal hold-on time of 12 months carries no entry load or exit load if redemption is made after six months.