November 2022

ithought
CO-IN FUND
Investing in High Quality Large Businesses
at the Price of Passive Fund

pms@ithought.co.in
www.ithought.co.in
+91 95000 27285
Investment Philosophy

Buy great business at appropriate valuation and hold them till they are great
businesses and sell them occasionally when the price far exceeds the value.

Methodology
ithought CO-IN Fund uses the NIFTY 50 Index (Containerization Process) as base
index and uses the invert principle to reduce the structural risk from NIFTY to avoid
wealth destroyers and enhance the investor experience.

Generally, portfolios are designed in search of alpha – outward looking from index.
ithought CO-IN Fund is an inward-looking Portfolio. It uses the elimination strategy
to reduce permanent risk and enhance the risk-adjusted reward for long term
investor.
For the 1st Time in India, we introduce a Fund whose philosophy is
built around two principles from two different disciplines.

CONTAINERIZATION PRINCIPLE
(NIFTY 50 INDEX)

INVERT PRINCIPLE
(reduce stupidity / errors)
What We Look For In Portfolio Companies
From Selected Universe

Strong Ownership Strong Balance Strong Market

Structure Sheet Position

Improving Growth in Growing Free Cash Flow Attractive Valuation

Medium Term
Our USP

Defined Elimination is Buy great

universe core business

70% more Alignment of No excess risk

affordable than interest taking
alternatives
Portfolio
Update

SEP-2022
CO-IN - Market Cap Composition

Small-cap

Large-cap 0

Mid-cap
20 stocks 0
NIFTY Vs CO-IN Profitability
Profit After Tax % FY 22
4% STOCKS
CONTRIBUTING
22% OF
CO-IN PROFIT Rest of
20 Stocks
CO-IN NIFTY-
22% 500
NIFTY-500
500 Stocks

Source: ACE Equity

NIFTY Vs CO-IN Profitability
NSE 500 Total PAT (Rs. Cr) CO-IN Total PAT (Rs. Cr)
12,00,000
10,14,720
10,00,000

8,00,000 6,87,986
6,00,000 5,01,579 5,34,883
3,99,480
4,00,000
1,85,609 1,89,603 2,28,246
2,00,000 1,42,143 1,60,219

-
FY18 FY19 FY20 FY21 FY22

FY17 FY18 FY19 FY20 FY21 FY22

NSE 500 Total PAT (Rs. In Crores) 4,95,061 5,01,579 5,34,883 3,99,480 6,66,261 10,14,720
CO-IN Total PAT (Rs. In Crores) 1,39,624 1,42,143 1,60,219 1,85,609 1,89,603 2,28,246
CO-IN PAT % of NSE 500 PAT 28% 28% 30% 46% 28% 22%
Source: ACE Equity
Profit Ranking of CO-IN Stocks in NIFTY500
Profit ranking in NIFTY 500 (out of 500)
Company Sector
2012 2022
Tata Consultancy Services Ltd. IT 6 4
HDFC Bank Ltd. Banking/NBFC 13 5
ICICI Bank Ltd. Banking 9 7
Infosys Ltd. IT 8 10
ITC Ltd. FMCG 11 15
HDFC Banking/NBFC 19 16
HCL Technologies Ltd. IT 39 20
Kotak Mahindra Bank Ltd. Banking/NBFC 46 22
Larsen & Toubro Ltd. INFRA 18 27
Bajaj Finserv Ltd. NBFC 45 32
Company 11 IT 106 43
Company 12 Auto 34 44
Company 13 Auto 49 54
Company 14 Pharma 32 58
Company 15 Auto 41 67
Company 16 Consumer Durables 99 76
Company 17 Pharma 52 80
Company 18 FMCG 176 100
Company 19 Insurance - 112
Company 20 FMCG 121 140
Source: ACE Equity
HDFC Bank – Fundamentals Drive Prices in the Long-Term
800

700
Book Value - 10 YR CAGR - 21%
600

500
Share Price - 10 YR CAGR - 17%
400

300

200

100

0
03-Sep-12 03-Sep-13 03-Sep-14 03-Sep-15 03-Sep-16 03-Sep-17 03-Sep-18 03-Sep-19 03-Sep-20 03-Sep-21 03-Sep-22

Share price Book Value

*Share Price & Book Value rebased to 100 | Data taken from 3rd September 2012 till 3rd September 2022
Source: ACE Equity
CO-IN – Top 5 Holdings

Data as on 30 September, 2022

 Evidence

FY 2021-22
Evidence I – Buy & Hold

SELLING
DECISIONS
ZERO SINCE FUND
INCEPTION
Evidence II – Phased Deployment
PHASED DEPLOYMENT

Equity % Cash %
100% 4.96% 5.61%
7.63% 7.90%
17.40%
32.90% 27.73%
80% 42.56% 37.60%
58.71% 52.68%
60%
69.60%
82.10%
92.37% 92.10% 95.04% 94.39%
40% 82.60%
67.10% 72.27%
57.44% 62.40%
20% 41.29% 47.32%
30.40%
17.90%
0%
Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22

CO-IN
Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22
Deployment

Equity 17.90% 30.40% 41.29% 47.32% 57.44% 62.40% 67.10% 72.27% 82.60% 92.37% 92.10% 95.04% 94.39%

Cash 82.10% 69.60% 58.71% 52.68% 42.56% 37.60% 32.90% 27.73% 17.40% 7.63% 7.90% 4.96% 5.61%

Market return 1.11% -0.41% 6.50% 0.89% 0.26% 8.69% 2.84% 1.05% -3.74% 3.50% 8.73% -4.85% -3.03%
Why Should You Go With CO-IN?

Scalability Buying Profitable Your time finally

Businesses becomes ‘YOURS’
Fund Positioning
CO-IN
RETURN
Where we EXPECTATION
operate Aggressive

400 –
500 bps
Moderate +
Avg.
Inflation

Conservative
Which Category Does CO-IN Compete With?

Credit Funds Asset Allocation CO-IN Fund

Funds
WHERE does CO-IN stand?

Asset Allocation
Credit Funds Funds CO-IN Fund
Cash/ Cash/ Cash/
Liquid Liquid Liquid

High Quality High/Low Debt-like

Debt Quality Debt Equity

Low Multi – Cap High-Quality

Quality Debt Equity Large-cap
Equity
HOW does CO-IN stand?

Credit Funds Asset Allocation CO-IN Fund

Funds
No Risk of Default
+
High Risk of Default Higher Expenses
Low Expenses
+ + +

No Upside Possibility Low Upside Possibility Medium Upside Possibility

Portfolio Management – Decision Making Journal

Based on Portfolio stock Universe – Model portfolio

will be built with desired weightage

Stocks which are available at an attractive valuations

will be bought immediately…

Stocks where the valuation is not attractive – the

stocks will be bought on a gradual basis and every
market correction will be used to add the stock at
lower valuation

Excess cash to be parked in liquid funds or liquid

ETFs / Gold ETFs
Risk Management Framework

The Dos: The Don’ts:

 Buying Quality Business  Buying businesses at high valuation

 Staggered portfolio building  No Short term trading
 Buy and hold strategy  Derivatives
Who Should Not Invest?
 Investors who have high alpha expectation

 Investors who are expecting state owned enterprises

and highly leveraged enterprises to do exceedingly
well in medium term

 Investors who are expecting high level of activity at

the portfolio level

@prostockstudio on freepik
Portfolio Performance & Portfolio Allocation

Portfolio Performance (30 November 2022) Portfolio Allocation

5.33%

Since
1 month 3 months 6 months 1 Year
Inception
CO-IN 4.03% 6.04% 12.18% 13.36% 10.59%
Nifty 50 4.14% 5.63% 13.11% 10.45% 13.35%
Equity
• Returns are post fees and expenses Cash & Equivalents
• Returns less than 1 year are absolute
• Inception date: 05/03/2021
• Cash levels in portfolio as on 30 November 2022 are 5.33% 94.67%
• Performance related information is not verified by SEBI
The Fund
Structure
The ithought CO-IN PMS comes with zero entry / exit load with no
lock in.

0% Fixed Fee * + Performance Fees of 20% profit

share above a hurdle of 6%, no catch up
Fee
Structure High water mark for performance fees

Minimum Investment = ₹ 50 Lakhs (INR)

*excluding custodian and brokerage charges

 The
ithought
Investment
Team
 SHYAM SEKHAR
CIO & Fund Manager

FUND MANAGEMENT

BALAJI GR ROHIT BALAKRISHNAN RAJAT SETIYA NIRANJAN SRIDHAR

Head of Research Co-Fund Manager (VRDDHI) Co-Fund Manager (VRDDHI) Head of Investment Strategy
Co-Fund Manager (CO-IN) (SPHERE)

RESEARCH STRATEGY

SENTHIL M SANJAY KUMAR E ATHREYA R SAMYUKTHA V ABHISHEK A

Sr. Research Analyst Research Analyst Research Analyst Principal Fixed Income Investment Strategist
Strategist

YASH TANNA VAISHNAVI G HARSHIL N ROSHAN R

Research Analyst Data Analyst Investment Strategist Investment Strategist

INVESTMENT MANAGEMENT PRODUCT MANAGEMENT

GAURAV JAIN Investment Manager - PMS GANESH A Product Manager - PMS

SHYAM SEKHAR
Ideator, Founder & Fund Manager

Mr. Shyam Sekhar has 3 decades of investing experience in franchise based high growth businesses.
He follows a theme-based approach to investing. His past successes have been – identifying
emerging themes to the changing economic context, investing early and realising the full potential of
the investment theme. His strengths include exposure to multiple industries as a research analyst,
creating large sized portfolios and investing across market cycles.

BALAJI G R
Head of Research & Co-Fund Manager

Balaji is a passionate equity investor with 14 years of expertise in financial markets. He follows
bottom-up approach to investing by identifying business with great ownership structure with profitable
business model and willing to hold for long term to realise full benefit of ownership of equity. He is a
regular columnist at The Hindu. He voraciously reads annual reports of various industries across
countries and books on investor behaviour. Balaji is involved with research and fund management at
ithought.
Happy Investing!
Disclaimer
All data/information used in the preparation of this material is dated and may or may not be relevant any
time after the issuance of this material. The recipient of this material is solely responsible for any action
taken based on this material. ithought Financial Consulting LLP (the Portfolio Manager) takes no
responsibility of updating any data/information in this material from time to time. The statements made in
this presentation are forward looking and based on our current views and assumptions and involve
known and unknown uncertainties that may cause actual results or events to be materially different from
those expressed herewith. The information contained herein should not be construed as forecast or
promise. Past performance of the Portfolio Manager may not be indicative of the performance in the
future. Investments in securities are subject to market and other risks.

Please note that all the portfolio related data published apart from performance data is as of
September 2022, except where expressly stated. To know more about us, visit our website –
www.ithought.co.in
Get in touch!

pms@ithought.co.in

www.ithought.co.in

+91 95000 27285

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