The Investment Trust of India (ITI) Mutual Fund is set to start its mutual fund journey with two new schemes – liquid fund and multi-cap fund.
While the fund house will launch its first fund – ITI Liquid Fund – on April 24, it will foray into equity through ITI Multi Cap Fund soon after. The NFO of the multi-cap fund will open for subscription from April 25 to May 9.
Talking about the fund, George Heber Joseph, CEO and CIO, ITI Mutual Fund said that the fund would always maintain at least 40% allocation to large-cap stocks. He believes the large cap bias will help the fund reduce risk. On current volatility in mid- and small-cap spaces, he said that his fund house would not go aggressive to create multi-cap portfolio as valuations of mid and small cap companies are not attractive. To begin with, the fund will have 60% exposure in large-cap stocks, he added.
Explaining the rationale for starting with a multi-cap fund, Joseph said that the fund would allow him a relatively free hand to pick stocks across market capitalization.
Before joining ITI MF, Joseph had worked at ICICI Prudential MF for more than a decade. In his stint at the ICICI Prudential MF, Joseph had managed the mid cap fund among other things.
Investment philosophy
Joseph said that to make the MF’s investment philosophy easily identifiable for investors they have created an acronym ‘SQL’.
In case of equities, this is what each letter stands for:
S – Margin of safety: This means the fair value of business minus the current share price. Hence, the fund house will look to buy stocks with a good safety margin.
Q – Quality of business
L – Low leverage
And in case of debt, this is what the letters denote:
S – Safety
Q – Quality
L – Liquidity
Future plans
The fund house will not launch schemes in all the categories. Instead, they will stick to a handful of funds. Over the next one year, the fund house would launch two more schemes – ELSS and arbitrage funds.
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