Series 57 – Conversation on Understanding Cycles and Volatility

Last week, we shared some data points that gave insights into the volatility measures of ITUS fund. This week we are presenting you an interview done with NDTV by our fund manager Mr. Naveen Chandramohan. He has spoken about portfolio positioning strategy for ITUS to create alpha for our investors.

Below we have highlighted a brief on the discussion –

1. Cyclical Beneficiaries: We believe in the value of economic cycles. Currently, we’re in an inflationary regime, and over the next 3-4 years, GDP-facing sectors will see the benefits.
2. Sector Positioning: Our portfolio focuses on Capital Goods, Power, Energy, Auto, and Manufacturing. We avoid Consumer and Banking sectors. IT investments are in unique ER&D companies.
3. Earnings Growth and Liquidity: We construct portfolios with companies showing 18-20% earnings growth, considering liquidity.
4. Managing Volatility: Equity means volatility. We actively reduce portfolio volatility to achieve consistent returns.
5. Auto Sector: Backing technopreneurs in manufacturing with unique R&D, playing import substitution to expand margins.
6. Two-Wheelers: Positioning in this segment due to volume growth after a decade.
7. Capital Goods Conviction: We have strong conviction in the Capital Goods segment related to power and energy manufacturing.
8. Power Portfolio: A diversified portfolio with thermal and renewable power generators and transmitters.
9. Pharma Mix: Our pharma exposure includes CDMO/CRMO, Indian Branded products, and US generics.
10. Growth and Valuation: Portfolio positioning emphasizes growth visibility, sustainability, and prudent valuation. Position sizing is carefully managed to maintain portfolio integrity.

To listen to the complete interview, please click on the link below –

https://www.youtube.com/watch?v=Lgl78x4GQ0s