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Profiting From Pessimism: A Contrarian Large-Cap Medalist

Gretchen Rupp

Gretchen Rupp: Guy Pope has been the sole manager at Columbia Contrarian Core (LCCAX) for more than a decade. He works with an experienced team of three analysts, who average more than 15 years of experience in the industry. They break their coverage by sector, although they are all generalists at heart. Pope's initial screen identifies stocks trading in the bottom third of their 52-week range. He believes this is a first pass at uncovering investor pessimism toward their holdings.

Next, they will perform bottom-up fundamental analysis and speak with management to identify their picks, which they believe are value and growth opportunities that will turn around in the next 12 to 24 months.

The portfolio generally holds between 60 and 80 stocks, and turnover has been in the 40% to 70% range annually, although it has been higher in years like 2008 and 2011 when pessimism has been higher. Still, Pope will hold holdings for longer term as well. Honeywell is a top-10 holding and has been in the portfolio for more than 10 years. Pope believes management still continues to show high growth and earning potential.

The team's strong stock-picking skills have led to solid performance over Pope's tenure. It's performed well in a variety of market environments, and it's beaten its benchmark by more than two percentage points annually through April 2015. Investors should consider the share class through which they can purchase this fund. Some share classes carry a load, and some are higher than average compared with peers.

With its strong performance and consistent process, Columbia Contrarian Core is a solid option for investors and earns a Morningstar Analyst Rating of Bronze.