takeaways from our previous quarterly call in December 2022 (1:28 minutes):
fundamentals are strong, valuation and liquidity are not.
Risk-reward is on the downside, if we get it right, we will deploy capital aggressively.
Expectation of volatility in 2023, which can be used as an opportunity to buy businesses. Snapshot of our
portfolio performance since inception in January 2017 to March 2023 (4:26 minutes):
SEBI mandates PMS to choose one of three benchmarks; ours is benchmarked against Nifty 50, the best-performing index in the country.
Rs. 1 crore invested in our fund would be worth Rs. 2.85 crores today, compared to Rs. 2.10 crores in Nifty (IRR of 18.25% against 12.8% on the benchmark).
What benchmark means to us (5:58 minutes):
We have analysed ITUS portfolio and Nifty.
Emphasized that we are active managers and do not track the index at any point.
Our performance is measured against the index over a
three-year horizon. We are
not buy-and-hold investors; our churn rate is 20% YoY.
Highlighting our three-year rolling returns (8:38 minutes):
consistently outperformed the index over a three-year period. Importance of
capital calls in creating alpha in the portfolio. Health check of our portfolio
Discussion on measuring companies’ pricing power through gross margins (11:25 minutes):
Gross margins are used as a measure of pricing power. We prefer companies that can maintain or increase their gross margins.
Our rationale for adding
IndusInd Bank to our portfolio and our outlook on the bank for the next three years (13:50 minutes). Explanation of why we
maintain cash, the difference between investing in mutual funds and ITUS, and why we do not invest if valuations are not in our favour (12:14 minutes):
We do not have a model portfolio.
We differentiate ourselves from mutual funds.
We do not invest if valuations are not favourable.
Emphasis of why we do capital calls during bear markets
Our Portfolio Level
Valuation represents a range of outcomes in bear, base, and bull case scenarios
Sectorial earnings update- IT and Auto (30:34 Minutes)
Why we continue to be
Cautious on the US market this cycle- because the risk reward is not favourable (34:40 Minutes) What is the outlook on India (37:44 Minutes)
Valuation Comparisons with rest of the world (40:15 Minutes)
Our View on
Inflation (40:40 Minutes) Our
We are growth investors
We look at buying at the right valuation
We want to be long term Owners of Businesses with a focus on Promoter/Management Quality
We expect to outperform Nifty in 3 Year cycles
We will be fully invested only when the portfolio IRR can be closer to 20%
Attached below is the link of the recording. You may forward the same to the clients too.
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
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