Series 51 – ITUS Portfolio Positioning vs Index

In our previous communication, we presented a snapshot from our Quarterly Investor Call, which analysed the distinctions between global markets and India, as well as the factors attracting FIIs to India. Today, we aim to emphasize our portfolio’s positioning relative to the index.

The below chart explains the sector exposure of the ITUS portfolio in comparison to the Nifty 50. Notably, our portfolio demonstrates a stronger alignment towards Auto and Auto Ancillary sectors, in contrast to the index, which exhibits a (less than 7%) underweight exposure in this area. Conversely, the index displays an overweight position in Financial Services (>35%) and IT (>13%), sectors where our portfolio is underweight. Consequently, it is fair to acknowledge that the portfolio may experience deviations in returns relative to the index over shorter timeframes, such as on a quarterly or semi-annual basis.

A fundamental aspect of our portfolio construction at ITUS is the consistent maintenance of RoIC at 1.5 times the cost of capital. We are confident in our portfolio’s ability to consistently outperform the Nifty over a long period of time typically 3-5 years, given that both our portfolio’s Cash Flow Growth and RoIC have consistently exceeded those of the Nifty, as depicted in the chart below. This guiding principle informs our approach to constructing each investor’s portfolio.

Also, continuously keeping you informed about our SIP program is a key commitment for us as SIP presents investors with a convenient avenue to regularly infuse capital into 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].

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