Series 61 – Itus Portfolio Health and its Measure

The previous week, we have shared our quarterly call recording where our fund manager has explained the portfolio positioning and market expectation in this cycle. This week we would like to talk about our portfolio health check and what are the measure that we consider while talking about the fundamentals of the portfolio.

There are two characteristics of our portfolio that has always stood out since the inception of the fund –

1. Strong Earnings Growth
2. Strong Return on Capital Since Inception

Our portfolio has experienced impressive earnings growth, totalling 342% since 2017 (Fig 1).The cumulative returns since inception stand at 275%, indicating a margin of safety in our holdings. These returns have been sustained through robust earnings growth. The second figure depicts the consistency in ROCE of the ITUS Portfolio across time that displays the efficiency of the capital allocation of the portfolio construct.

Earnings and Margins would be the key drivers of portfolio construction and what we focus is minimising the drawdowns and risk if we get the macros and volatility wrong than the focus on maximizing returns.

 

 

In case you have missed our previous week’s message on the quarterly call recording, below is the link –

https://www.youtube.com/watch?v=shnGi_q9GPU