Should I Exit From Magnum Contra?


I invested in Magnum Contra (G) through an SIP of Rs 5,000/month over the past year and the results have not been great. Should I stay invested or redeem my units and switch to another fund? My investment horizon is about 15 years.
- Amit Mehra

If you take the 1-year performance of Magnum Contra (20.22%), it has outperformed the Sensex (15.86%) and its benchmark, the BSE 100 (18.65%). However, it has underperformed the equity diversified category average (28.31%). The reason could be that it has more than half of its portfolio in large-cap stocks. Moreover, the fund's objective is to primarily invest in undervalued scrips which could be out of favour at the time of investing but are likely to show attractive growth over the long term. So there could be bouts of underperformance when the fund manager keeps away from momentum stocks. But over the long term this fund has kept its investors happy. Its 5-year annualised return is 25.82 per cent. Since your investment horizon is 15 years, stay on.

source; valueresearch