Religare Invesco Contra Fund: Buy with outlook of 3 years

Religare Invesco Contra Fund is an open ended fund with major concentration of its asset in Banking & Finance sector, followed by Engineering and Oil & Gas. The fund has consistently outperformed its benchmark indices over one and three year time period. Investors with slightly conservative approach can consider this fund for investing, reckons Arnav Pandya.

• The fund seeks to use contrarian investing to generate returns for its unit holders. At the end of December 2011, banks was the top sector with a 13 per cent share closely followed by software and consumer non durables. Infosys and Bharti were the top individual holdings in the portfolio with a 6 per cent share each. ITC, Reliance Industries, ICICI Bank, NTPC, ONGC and Britannia were some of the other leading stocks in the portfolio. The portfolio turnover ratio was 0.9 times. The S&P BSE 500 is the benchmark index for the fund and it was an outperformer over the one and three year time periods.
• Six months later, there was a consolidation in the bank holdings for the fund as the share in the portfolio went up to 18 per cent. Software, petroleum products and consumer non durables were the other areas with a significant share in the portfolio. Infosys continued to be the top stock with a 7 per cent share.  Maruti, Britannia, ONGC, ING Vysya Bank, Reliance Industries, HPCL. J&K Bank and ITC were some of the other leading holdings in the portfolio. The fund saw its portfolio turnover ratio steady just below the 1 times mark. The fund was an outperformer over the one and three year time periods.
• There was not much change in the sector positions at the end of December 2012 as banks and software remained at the top two spots. Industrial products, auto, petroleum products and consumer durables were some of the other sectors with a notable share.  Maruti Suzuki was now the top individual holding in the portfolio. Britannia, ING Vysya Bank, Infosys, J&K Bank, Federal bank, Reliance Industries and ONGC were some of the other holdings. The portfolio turnover ratio had dipped to 0.78 times. The fund was on par with its benchmark with marginal differences over the one and three year time periods.
• There was a spurt in the holdings of the top sector in the fund as the share of banks had gone up to 24 per cent at the end of May 2013.  Consumer non durables, power, construction project and software were some of the other leading sectors. Britannia Industries was now the top individual holding with an 8 per cent share. ING Vysya Bank, Maruti Suzuki, ICICI Bank, ONGC, Power Grid, Axis bank, and J&K Bank were some of the other leading holdings. The portfolio turnover ratio remained steady at 0.7 times. The fund was an underperformer over the one year period but an outperformer over the three year one ending March 2013.
• Investors who are slightly conservative and are willing to invest in the broader overall market with a time horizon of more than 3 years can consider this as an investment option for their portfolio.