Series 92 – ITUS: The Way Forward in 2025 – Our Thoughts

As we step into the new year, we anticipate increased market volatility. Here, we highlight the key themes and opportunities that lie ahead amidst this volatility. Our portfolio has always maintained a contrarian approach, not by design to avoid mimicking the index, but because we believe in sectors that offer earnings-driven growth. This approach has naturally led us to diverge from the index.

Given the expected volatility, we will continue to add risks to the following sectors:

Pharma: Currently, we are overweight in this segment with an exposure of approximately 20%. We see strong growth potential driven by low-cost manufacturing and reduced price erosion in the US Pharma market.

Auto and Auto Components: Our focus is on strong two-wheeler volume growth in OEMs.

Consumer Staples: With Rural recovery as a theme, we expect volume growth in this segment.

Non-lending Financials: With the growing financialization in the country, we are positioning away from banking and into non-lending financial companies.

Capital Goods: We see a positive growth outlook driven by capital expenditure and supporting policies.

As earnings shift from broad-based to narrow-based growth, the market should pivot towards low-volatility investing, unlike the momentum-based trend of the previous year. We plan to reduce the number of names in our portfolio to 30-32, cutting down the tail and increasing the top exposures. Despite the expected volatility, our goal is to increase risks in the above growth sectors as we receive additional capital from our investors.

By focusing on these strategic sectors, we aim to navigate the volatility and capitalize on growth opportunities in 2025 as we believe this year would be a good year for Portfolio Construction.

 

We also keep writing to you about our SIP program that presents investors with a convenient avenue to regularly infuse capital into the client’s portfolios. If you need more info, reach out to your dedicated relationship manager at [email protected].

These weekly episodes are now available in our website for your quick read and you may access the same in the below link.

Weekly Enlightenment Archives – ITUS Capital