Pengana's Asian Equities Long Short fund gained 22.5 per cent, net of fees, in the year to June against its benchmark's loss of 6.1 per cent - proof that even in the worst of times, fund managers that make the smart calls can deliver.

Not many fund managers back major "contrarian" calls and live to tell the tale. But Diane Lin, fund manager at Pengana Capital, made two huge calls in less than 12 months - both of which paid off.

First, in June last year, the consensus was that the emerging markets world would be immune to the housing loans crisis unfolding in the US. Not so to Lin and her team. They promptly slashed the fund's equity exposure from 30 per cent to 10 per cent and hedged against the swift (and record) fall of the Australian dollar well before Asian equity stocks (and the Aussie dollar at one point) practically went on freefall.

"We generated positive returns by managing the volatility well, particularly through last year where we understood from previous experience the impact of a housing bubble bursting, the most recent example of that is Japan," said Lin.

"We were quite prepared for the correction because we realised even after Lehman collapsed that the market underestimated [the effect of the US sub-prime crisis] and the market's irrational behaviour after that," she added.

The second contrarian call she made was that when sentiment was at its worst in December last year due to economic uncertainty, Lin flipped the switch and increased the fund's market exposure from 10 per cent towards 40 per cent.

The fund bought stocks that Lin thought were substantially oversold, particularly industrial material stocks after doomsayers warned the China boom has prematurely ended because of the financial crisis.

Forget that. Instead Lin flew to the Pearl River Delta region, the hub for US exports, to see for herself what the supply-demand is going to be. Combine that with her analysis of the Chinese government's stimulus packages and the exodus to defensive Asian stocks and by the time she got off the plane, she had the recipe: go long on cyclicals and short those that have been oversold. Manage the risk with "prudent currency management", which is as simple a description as you could say for what is really a clever but complicated currency hedging strategy factoring in all the variables affecting the Asia region.

"Our style is to be "slightly contrarian" but with reason. Our investment decisions have to have the fundamental support and draw on the experience of our team within the region. I've seen this cycle before and I've seen it again and again," said Lin, who has worked for 15 years in the industry including stints at Platinum Asset Management, UBS, Perennial and Nomura (Japan).

Despite the fund's performance, chances are financial planners haven't heard of it yet. Pengana Asian Equities Long Short fund was only launched last May and has $2.4 million seed money from the company, with no external investors.

But now that the fund has a one-year performance number to talk about, Lin said they are working on having it available to retail investors this year.