The newly launched Bajaj Finserv Large and Mid Cap Fund reopens for subscription today after a successful NFO period. This open-ended equity scheme by Bajaj Finserv AMC aims at long-term wealth creation by investing predominantly in large and mid-cap companies. At the heart of this scheme is the moat investing strategy.
Bajaj Finserv Large and Mid Cap Fund
What is moat investing
An economic moat serves the same purpose as a moat in a medieval fortress – it’s an additional defence against the competition. Moat investing is a strategy of identifying and investing in companies that have such effective buttresses and advantages over their peers in an increasingly competitive economy.
Bajaj Finserv Large and Mid Cap Fund aims to combine the relative stability of large cap stocks with the growth potential of mid cap companies to create a diverse and balanced portfolio that seeks to capture opportunities across market capitalisations.
The scheme aims to focus on companies that with a distinct competitive advantage – through innovation, differentiation, adaptability, cost advantage, efficiency of scale, consistent performance, among other things. Such a strategy seeks to capitalise on the growth potential offered by the equity market while mitigating the impact of volatility by focusing on companies that have consistently delivered results across market cycles.
Apart from moat investing, the strategy for creating Bajaj Finserv Large and Mid Cap Fund portfolio is based on the following principles:
InQuBe investment philosophy: The company’s InQuBe investment philosophy has three tenets: information edge, quantitative edge, and behavioural edge. The philosophy combines information gathering, analysis, and the understanding of how human behaviour drives investment decisions to create a holistic approach to identifying investment opportunities.
Other features of the scheme
Growth-oriented: The inclusion of companies across market capitalisations allows the scheme to leverage the relative stability of large cap companies with the growth potential of mid cap companies. This, along with the strategic selection of assets with moat investing, aims to generate capital appreciation over the long term while mitigating risk.
Diversified portfolio: Apart from large and mid cap stocks, the scheme will also invest in a handful of debt securities and money market instruments to provide additional stability and liquidity to the portfolio.
High active share: The portfolio allocation will have a high active share – i.e., it will not merely replicate the benchmark index but will be driven by the fund manager’s independent and strategic investment decisions. This approach gives the scheme the potential to outperform the benchmark index because the portfolio composition is driven by the fund manager’s insights and expertise, allowing it to adapt to market conditions.
Low turnover portfolio: With an investment strategy based on long-term vision and growth, the scheme aims to have a low turnover portfolio, which means that instead of frequent buying and selling, the scheme will follow a buy-and-hold approach. This not only creates stability in the portfolio but also reduces transaction costs for the investor.
Scheme details
Type of scheme: An open ended equity scheme investing in both large cap and mid cap stocks.
Plans: Bajaj Finserv Large and Mid Cap Fund Direct Plan
Bajaj Finserv Large and Mid Cap Fund Regular Plan
Minimum Application Amount: Rs. 500 (Plus multiples of Re.1)
Minimum Additional Application: Rs. 100 (Plus multiples of Re.1)
Entry Load: Not Applicable
Exit Load: 10% of units up to six months from allotment- Nil
Above 10% of units within six months from the allotment – 1% of applicable NAV
More than six months from the allotment – Nil
Benchmark: Nifty Large Midcap 250 TRI
Conclusion
Bajaj Finserv Large and Mid Cap Fund is driven by an investment strategy based on identifying companies with economic moats and using information, analysis, and understanding of investor behaviour to drive investment decisions. Investors seeking long-term growth and capital appreciation could find in it an interesting investment opportunity owing to its diversified portfolio, high active share, and commitment to a low turnover portfolio.
Investors can invest in the Bajaj Finserv Large and Mid Cap Fund by visiting the official website of Bajaj Finserv AMC. Investors are encouraged to analyse the fund’s scheme-related documents and assess whether its objectives align with their financial goals before investing. It’s always advisable to seek help of a financial advisor to make an informed investment decision.
About Bajaj Finserv Asset Management Ltd.
Bajaj Finserv Asset Management Limited, a wholly-owned subsidiary of Bajaj Finserv Limited, has announced its presence in the investment solutions industry. Backed by one of India’s most respected and oldest brands, it offers a host of innovative products and solutions to every Indian. With a future-focused and differentiated investment strategy, its ambition is to help every Indian achieve his/her financial goals.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
