Series 62 – Risk Mitigation through Portofolio Construction

The previous week, we have highlighted the health of the portfolio and measured it through Earnings growth and return on capital. The portfolio has consistently shown strong return on capital Since inception on the fund. This week we are highlighting the 5 levers of risk mitigation process with ITUS portfolio construction.

At the core of what we do, there are 5 key aspects of risk management in portfolio construction-

1. .Sector Concentration: We are sector agnostic fund and investment in a particular sector is purely focussed on growth and the cycle we are in the market.
2. Market Capitalization: We’re flexible across market caps, and to manage liquidity in the portfolio we do not invest more than 25% in small caps.
3. Stock Concentration: Concentration is never a starting point for the fund and We concentrate holdings based on business conviction and adjust to enhance position on trim it depending on the execution.
4. Portfolio Diversification: Our portfolio can range from 15 to 30-35 stocks based on market dynamics.
5. Cash: We do not shy away from holding cash for anticipated volatility to buy businesses at better prices.