The latest entrant in the mutual fund industry, ITI Mutual Fund has launched its first equity product - ITI Muti Cap Fund. The scheme is an open ended diversified equity scheme positioned as a one stop equity investment solution. The fund house believes that its unique equity investment philosophy "SQL" helps to buy excellent quality growing companies stocks with reasonable margin of safety and hold it for long term. This will help investors to experience good compounding effect and long term wealth creation.
ITI Multi Cap Fund will focus on providing investors a superior risk adjusted investment performance for long-term wealth creation. ITI MF seeks to deliver the above proposition by focusing on SQL, its unique internal philosophy. SQL philosophy is based on three main pillars; S - Margin of Safety, Q - Quality of the Business and L - Low Leverage.
Margin of Safety is the fair value of business minus the current share price. Buying stocks with good safety margin is critical for a good investment experience and long term wealth creation.
Quality of Business is of great significance. Quality companies with strong competitive advantages have been long term wealth creators. ITI Multi Cap Fund would invest in stocks that it understands and have comfort on Industry structure, business, management, growth ambitions and balance sheet.
Leverage is also an important criterion to be factored in investing decisions. High leverage significantly reduces a business's ability to withstand business downturn. Low leverage companies are generally cash rich. Therefore, these companies are able to invest and grow their business and create wealth.
Speaking at the launch, Mr. George Heber Joseph, CEO & CIO and also co-fund manager of the scheme said that "SQL investment philosophy is unique in India but a globally proven investment philosophy which is designed towards creating long term wealth for investors.
ITI MF believes that this investment philosophy would stand the test of time and follows from the overriding belief that "If we avoid the losers, the winners will take care of themselves."
ITI Multi Cap Fund - Investment Strategy & Approach
ITI Multi Cap Fund will adopt a differentiated approach to portfolio construction. Portfolio construction will be benchmark agnostic. The fund will follow a differentiated strategy to manage risk during bullish and bearish market scenarios and suitably align the portfolio.
Superior performance in a bull market can be achieved by taking above average risks. However, it takes superior performance in bad times to prove that those good-time gains were earned through skill, not simply the acceptance of above average risk.
Portfolio construction is dependent on business cycle, valuations and earnings growth prospects of the companies selected. The stock selection process will be bottom up and focus on investing in good and sound businesses that ITI MF understands well.
The ITI MF investment universe is divided into core stocks universe and tactical stock universe. Typically, core set comprises of companies in businesses with good growth potential, superior capital efficiency, enterprising management team, good governance, history of good capital allocation, strong business position in their respective product/service markets, strong franchises with network effect, market share gainers, cost leaders, great brands, companies that are able to generate at least 13% ROE on a long term basis. About 75% of the portfolio would be invested from the set of core stocks. ITI MF believes that more research on the core set of good businesses leads to better results than experimenting with mediocre company's stocks. Good companies generally give good results in long term and mediocre companies generally disappoint in the long term. So, the time and energy of our analysts and fund managers would be utilized mostly to analyze good companies and not mediocre companies.
ITI MF follows GARP style of investing i.e. Growth at Reasonable Price and not growth at any price. The most important factor is to invest in good and sound businesses which ITI MF understands well. Additionally, we would tactically invest in good companies going through temporary problems, with a possible upside catalyst. The fund will generally be minimum 90% invested. Typical portfolio construction would include 35-40 stocks. For the purpose of allocation between Large, Mid and Small Cap segments a unique internal research driven process will be followed which is based on valuation, expected earnings growth, market and business cycles. The fund would typically maintain minimum 40% allocation towards Large Caps and can go up to 100%* based on market conditions. Allocation to large caps would provide stability to the portfolio with reasonable returns. Allocation to Mid and Small Caps would be alpha accretive.
*During the initial deployment period, the fund will gradually build portfolio towards the stated allocation
ITI Mutual Fund is backed by ITI Group, an emerging, innovative and conservative financial services conglomerate which has interest in various financial services businesses. ITI Mutual Fund aims to offer high-quality investment solutions to investors backed by robust investment management and research expertise.
ITI Multi Cap Fund - Fund Facts
Investment Objective: The investment objective of the scheme is to generate long term capital appreciation from a diversified portfolio that predominantly invests in equity and equity related securities of companies across various market capitalization. However, there can be no assurance that the investment objective of the scheme will be realized.
Asset Allocation: The fund will invest up to 65% to 100% of portfolio in equity & equity related securities across market capitalisation. And 0% to 35% in debt and money market instruments.
Fund Managers: Mr. George Heber Joseph and Mr. Pradeep Gokhale
Benchmark: The scheme is benchmarked to Nifty 500 Total Return Index
Plans and Options: Plans: Regular & Direct
Options: Growth, Dividend Payout, Dividend Reinvestment
Minimum Application Amount - Rs 1000/- and in multiples of Rs.1/- thereafter
Additional Application Amount - Rs. 1000/- and in multiples of Rs. 1/- thereafter
Systematic Investment Plan (SIP) - Available. Minimum Amount - Rs 500 per instalment
Entry Load - NA
Exit Load - Within 12 months from the date of allotment in respect of Purchase made other than through SIP, and within 12 (twelve) months from the date of allotment in respect of each Purchase made through SIP - 1%. Beyond 12 (twelve) months from the date of allotment - Nil. A switch-out under Systematic Transfer Plan (STP) or a withdrawal under Systematic Withdrawal Plan (SWP) shall also attract Exit Load like any Redemption.