Last week, we brought attention to our PMS Investor report, an integral component of our standard reporting format, accessible to investors through our ITUS Dashboard. This week, we are drawing your attention to the Capital Call communication we have shared with our investors. The rationale behind our Capital Calls has been previously outlined in our earlier episodes, where we discussed the advantages of adding funds during these calls for the benefit of our investors. You can find more information about this in the following link:
A Note to our Investors- Capital Call from ITUS – At ITUS our focus has always been on risk management first. We believe that the role of a fund management house is to protect our clients’ capital, and then seek to generate returns. This concept might be challenging to understand unless the markets experience instability, testing both your losses and beliefs. Good fund managers consistently outperform the market across different cycles because they are able to effectively position their portfolios during volatile periods.
What did we do in the past few months? – Risk management has two aspects, one of which is increasing cash holdings when the potential for upside returns decreases. Over the last three months, we have had higher-than-normal churn in our client portfolios. We trimmed or fully exited some of our mid and small cap positions, such as Metro Brands, Linde India, Rainbow Hospitals, Ahluwalia Contracts, HDFC Life, and Neuland Laboratories. We did this because we believe that the cost of upside has lowered in these stocks, and we want to reduce our risk. We additionally deployed some of the cash raised into large caps in auto, manufacturing, and banking, which we continue to be optimistic about.
What is our outlook for the market? – We believe that there is a high probability of the market being volatile in the near term. We see this as an opportunity to pick up good quality businesses in the portfolio.
What is our expectation from our investors? – We would like you to consider adding capital to the fund over the next 2 months. We believe that the volatility we are experiencing now is a good time to deploy capital.
We had written last on a capital call in Jan 2023, and we believe that this volatility presents a good opportunity to invest our capital. You may call us in case you require more information on this message.
Also, as a part of our ongoing commitment to keeping you informed, we remain dedicated to our SIP program, providing investors with a convenient avenue to regularly enhance their portfolios. We encourage you to explore the benefits of this program for your clients. If you require more details, please don’t hesitate to reach out to your dedicated relationship manager at [email protected]. Till we see you next week, have a great weekend.