Series 40 – Running a true Multi-cap fund at Itus. What does it mean for Investors?

Last week, we had an interview briefing with our Fund Manager that featured on Money Control. During the interview, we shared insights into our earnings outlook, perspectives on the Auto and Real Estate sectors, and highlighted sectors where we anticipate challenges. This week, we are presenting data depicting the returns profile of the Small Cap Index and NSE’s top 100 companies since 2005.

ITUS has consistently maintained a market cap-agnostic approach. This means that, throughout the fund’s history, we have navigated various market caps. Our exposure to a specific market cap has always been a result of strong fundamentals, prioritizing investments in growth while remaining mindful of valuations, without compromising liquidity. We exercise caution by avoiding overheated sectors and companies, steering clear of getting swayed by narrative.

In this regard, we would like to share a table below that illustrates the annual returns of the Small Cap Index compared to the NSE 100 over the past 18 years. It’s essential to observe the volatility in the yearly returns of the Small Cap Index. On average, the Small Cap Index has surpassed the NSE 100 by 4% in terms of annual returns. The three-year rolling average between the indices has been comparable, while the rolling five-year returns reveal that the NSE 100 has outperformed the Small Cap Index by 2%. While there will always be an element of alpha an investor can maintain through sensible and prudent stock picking, managing risk and drawdowns is an essential part of the fund’s journey at Itus.

We have been in the process of trimming our exposures to small caps in the fund and rebalancing our risk. We will continue to do this and allocate incremental capital into large caps into the sectors we are seeing growth.

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

To keep you updated, we’re committed to our SIP program, offering a convenient way for investors to regularly improve their portfolios. Feel free to check out the benefits for your clients. If you need more info, reach out to your dedicated relationship manager at [email protected].