Bajaj Finserv Large Cap Fund: What Type of Investors Would it Suit
Investing in the stock market through equity funds can be daunting. On the one hand, it offers higher return potential than most traditional investment avenues. On the other hand, it comes with a fair degree of uncertainty and volatility.
Bajaj Finserv Large Cap Fund
However, large cap funds seek to balance this growth potential with relative stability, making them an attractive option for various types of investors. The newest such fund in the market is the Bajaj Finserv Large Cap Fund, which differentiates itself with other funds in this category through its concentrated strategy, high active share and quality over quantity approach. The New Fund Offer period, where investors can purchase units in the fund for the first time, began on July 29th, 2024, and is on till August 12th, 2024.
This article tells you more about the Bajaj Finserv Large Cap Fund and what investors it may suit.
Features of Bajaj Finserv Large Cap Fund
The Bajaj Finserv Large Cap Fund is an equity fund investing predominantly in large cap companies. These are the country’s top 100 companies on the stock exchange and are typically market leaders, with a track record of relatively stable growth, healthy balance sheets and profitability. Within this investment universe, the Bajaj Finserv Large Cap Fund seeks to further optimise return potential by focusing on just 25-30* stocks. These are high-conviction stocks selected by the fund manager after extensive research. The stocks belong to companies that are the Champions of Corporate India, with strong fundamentals, competitive advantages, relative resilience to downturns and which are poised to be at the forefront of India’s global economic rise.
This concentrated strategy also allows fund managers to allocate more resources to the stocks whose growth prospects they are optimistic about. Additionally, it gives them more freedom to implement strategic decisions than an index-hugging portfolio would. This strategy also allows for enhanced research and monitoring of the portfolio.
High active share
Bajaj Finserv Asset Management Limited’s Large Cap Fund has a high active share, indicating that its holdings would be significantly different from the benchmark index, giving it greater potential to outperform the market in the long term. A high active share indicates that the fund manager has greater scope to make active investment decisions to optimise return potential.
Who should invest in Bajaj Finserv Large Cap Fund
Given its unique features, the Bajaj Finserv Large Cap Fund can be suitable for several groups of investors. These include:
1. Long-term investors: Investors who have an investment horizon spanning several years can benefit from the long-term growth potential of this fund, with its focus on high-quality, high-conviction stocks.
2. Investors seeking relative stability: Investors seeking to mitigate the impact of volatility on their investments may find this fund suitable. Large cap funds invest in established companies with robust financials and a proven track record. Additionally, the focused strategy allows the fund to focus on high-quality companies that have the potential to show greater resilience to market movements and make speedier recoveries after downturns.
3. Those seeking an active investment strategy: Unlike schemes whose portfolio replicates or closely mirrors the benchmark index, the Bajaj Finserv Large Cap Fund will have a high active share. This indicates a high degree of active management, with fund managers making strategic decisions to potentially outperform the market in the long run. Investors who prefer an active management style that has the potential to offer benchmark-beating returns can find this fund suitable.
4. Investors looking for diversification: While the fund is concentrated, it offers diversification across different sectors and industries.
5. Investors seeking professional management: Investors who prefer to leave investment decisions to professional fund managers can consider this fund. The fund’s management team conducts thorough research and analysis, making informed decisions to optimise long-term return potential. This helps investors access a diversified and strategically managed portfolio.
6. New investors: Those investing in the financial market for the first time may find large cap funds to be suitable, as they can offer exposure to the equity market without the high volatility associated with smaller stocks. This can help investors assess their comfort with the equity markets and understand their functioning.
7. Investors seeking quality stocks: The high-conviction stock selection process may appeal to investors seeking to invest in well-established companies with strong financials, robust business models, and competitive advantages.
8. Those nearing retirement: Investors in their late 40s who are nearing retirement age can consider switching from more aggressive equity options to large cap funds to mitigate the impact of volatility on their investment.
How to invest in Bajaj Finserv Large Cap Fund
The NFO period is on till August 12th, 2024. Investors can purchase units at the face value of Rs. 10 during the NFO period. Once the fund reopens for subscription, investors can purchase units at the applicable Net Asset Value or NAV.
You can invest through lump sum or through regular instalments using a Systematic Investment Plan (SIP). The minimum investment amount for each is Rs. 500.
To invest, visit www.bajajamc.com and click on login/register on the home page, or the ‘Invest Now’ button on the Bajaj Finserv Large Cap Fund scheme page. On the investor portal, existing investors with Bajaj Finserv AMC can log in with their PAN. New investors will need to sign up.
You can also invest online or offline through distributors and aggregators.
*The above investment strategy is based on prevailing market conditions and opportunities available at the time of investment. The Fund Manager reserves the right to change the count of stocks invested based on the SID and the opportunities available at the time of investment done, Position in derivatives will not be considered for the computation of total number of stocks in the portfolio.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
