Series 88 – ITUS Portfolio Vs Nifty 50 Vs Nifty 500 Weights

Last week, we provided an overview of our portfolio positioning, our response to market volatility, and a snapshot of our portfolio’s earnings and margins behaviour. In the coming weeks, we aim to delve deeper into our portfolio’s earnings review report and highlight key themes of interest.

We have always looked at Strategic Positioning of our portfolio, avoiding Index hugging. We identify and capitalize on sectoral cycles rather than closely mimicking the index. By investing in sectors poised to benefit from cyclical trends, we ensure our portfolio remains dynamic and responsive to market conditions. All of these while not compromising on the Earnings capabilities and potential for margin expansion. This focus ensures that our investments are fundamentally sound and capable of delivering sustainable returns.

The key highlights from the sector exposure the following quarters are –

Overweight in Pharma: Our substantial allocation to the healthcare sector, has provided a cushion against drawdowns experienced in the last 1.5-2 months. We see earnings way above the mean growth in this sector along with margin expansion. We continue to remain overweight (17.3%) in this sector, where indices have not more than 3-4 % exposure.

Auto and Auto Components: We have brought Government Spending Anticipated Increase: down our Auto and Auto components on the 4 wheeler segment from a 22% down to a 6.5%, more focussed on two wheeler.

Away from Banking– The drawdowns experienced in the portfolio is because we were predominantly underweight banking. We are still in a juncture where macro is not favourable for banks. We observe signs of slowdown in the NII % growth across bank both in Pvt and PSU’s and hence underweight in this sector compared to the indices that have  highest exposure. Allocation would be specific bottom up story where players who have maintained healthy asset quality and growth in challenging environment.

We foresee an uptick in government spending over the next quarter, which is expected to positively impact companies in the capital goods and GDP-facing sectors. This anticipated fiscal stimulus is likely to drive growth and enhance performance in these areas.

Stay tuned for more detailed insights over the next few weeks, into our portfolio’s earnings and the themes driving our investment decisions.

 

We also keep writing to you about our SIP program that presents investors with a convenient avenue to regularly infuse capital into the client’s 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