ITI Business Cycle Fund - Regular (G)

The Scheme follows an active investment strategy. The investment strategy of the Scheme is focused on achieving long-term capital appreciation by primarily investing in equity and equity-related securities. The Scheme`s core philosophy is to take advantage of different phases of the business cycle-recurring patterns of expansion and contraction in economic activity. These cycles typically go through four stages: expansion (accelerating growth), peak (growth stabilizes at a high point), contraction (growth slows or declines), and slump (period of weak or no growth). Though business cycles differ in duration, intensity, and causes, they consistently recur in all economies. To align the investment portfolio with these cycles, the Scheme employs a dual investment approach-top-down and bottom-up. The top-down method is used to assess the current phase of the business cycle and identify macroeconomic and sectoral opportunities. In doing so, the fund manager evaluates a wide range of indicators such as GDP growth, inflation, interest rates, policy changes, business confidence indices, global economic trends affecting exports, and geopolitical developments. Industry-specific factors like market competition, pricing power, consumer sentiment, capacity utilization, and capital expenditure plans are also considered to provide a holistic economic outlook. This comprehensive macro view guides the allocation of investments across sectors and themes. Concurrently, the Scheme uses a bottom-up stock selection process based on in-depth in-house research and fundamental analysis. The fund manager evaluates company-level factors such as financial health, leadership quality, business model strength, scalability, and relative valuation. Companies demonstrating a sound combination of strong fundamentals, effective management, and attractive pricing are preferred. This process also enhances understanding of the underlying trends within sectors and helps refine the assessment of the business cycle`s trajectory. The Scheme aims to dynamically construct a portfolio that can capitalize on earnings improvement during the upward phases of the business cycle-primarily the expansion and peak stages. It seeks to identify companies that are well-positioned to benefit from cyclical growth while maintaining a focus on reasonable valuations. Though sector allocation is influenced by the stage of the business cycle, the Scheme ensures diversification across multiple sectors, sub-sectors, and market capitalizations (large-cap, mid-cap, and small-cap) to manage concentration risk. While the central focus remains business cycle investing, the Scheme maintains flexibility to capture investment opportunities beyond the prevailing cycle. It can invest in secular growth themes that perform well regardless of the cycle, as well as companies demonstrating resilience or outperformance in their sectors. Additionally, it will pursue tactical, short-term opportunities with favourablerisk -reward potential. However, to ensure alignment with the Scheme`s main objective, such investments will be capped at a maximum of 20% of the total assets. Apart from equity, the Scheme may also invest in debt and money market instruments to manage risk and provide portfolio stability, especially during uncertain market conditions. Debt investments will be guided by factors such as credit quality, liquidity, interest rate outlook, and broader economic conditions. The Scheme is permitted to invest in a wide range of fixed-income instruments including government securities, corporate bonds, structured obligations, credit-enhanced instruments, and securitized debt, within SEBI`s regulatory limits. To further diversify and generate alternative sources of return, the Scheme may invest in hybrid securities such as units of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs), subject to SEBI regulations. It may also invest in units of other mutual fund schemes in line with the overall investment objective. Additionally, the Scheme will consider opportunities in initial public offerings (IPOs), new market themes, and emerging sectors that meet its investment criteria, enabling early entry into high-growth areas. As part of its risk management strategy, the Scheme may use derivatives like futures and options for hedging and efficient portfolio management, in accordance with SEBI guidelines. These instruments will be used within defined exposure limits and regulatory frameworks. Investors may refer to the Scheme Information Document (SID) and Statement of Additional Information (SAI) for more detailed information on derivative strategies and risk controls. The Scheme may also participate in stock lending and borrowing activities, which could help generate additional income for the portfolio. These activities will be conducted under strict regulatory and risk management oversight to protect investor interests. It is essential to understand that while the Scheme follows a disciplined and research-driven investment process, it does not offer any guarantees of returns. The performance of the Scheme will be influenced by market dynamics, economic trends, company-specific factors, and other external risks. Hence, the Asset Management Company (AMC), Sponsor, and Trustee do not assure the achievement of the Scheme`s investment objective.