How is Bajaj Finserv Large Cap Fund Different

In the equity mutual fund space in India, large cap funds are a popular investment option. Such funds invest predominantly in the well-established companies, making them suitable for investors who want to combine growth potential with relative stability.

Bajaj Finserv Large Cap Fund NFO

The latest addition to the large cap fund space is the Bajaj Finserv Large Cap Fund. Launched by Bajaj Finserv Asset Management Ltd., this fund follows a unique concentrated strategy for its portfolio, seeking to optimise return potential while mitigating risk. The New Fund Offer period, where investors can buy into the scheme 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 how it is different from other funds in its category.

Concentrated strategy

Large cap funds invest at least 80% of their portfolio in large cap companies – those that are listed between 1 and 100 on the stock exchange. This relatively small investment universe can make it challenging for such funds to deviate significantly from the benchmark index (such as the Nifty100). This, in turn, can make it difficult to generate alpha – or returns that beat the benchmark – in the long-term.

That’s where Bajaj Finserv Large Cap Fund differentiates itself. The fund adopts a ‘quality over quantity approach’ choosing just 25-30* stocks for its portfolio.

This strategy involves meticulously selecting high-conviction stocks – securities that the fund manager believes have strong long-term growth prospects. This selection is done through thorough research and analysis. These stocks are carefully selected to provide an optimum balance between risk and return potential. The fund manager will diversify across sectors to spread risk.

The Bajaj Finserv Large Cap Fund will focus on Champions of Corporate India – the country’s leading companies – for its concentrated portfolio. These are companies that have been leading the charge of India’s impressive growth story. They have strong fundamentals, healthy balance sheets, a competitive edge, and a track record of relatively stable growth. These are also stocks that have shown resilience to market conditions – registering relatively smaller declines during market downturns and making speedier recoveries. They have also shown consistent long-term growth (past performance may or may not be sustained in the future).

Active share

With this concentrated strategy, the Bajaj Finserv Large Cap Fund will also have a high active share.

Active share measures the extent to which a portfolio’s holdings differ from the benchmark index. High active share suggests that the manager is taking significant positions away from the benchmark in an attempt to outperform it. Conversely, a low active share indicates that the portfolio closely tracks the benchmark, implying a more passive management style.

The Bajaj Finserv Large Cap Fund will thus craft a portfolio with a high active share to potentially achieve the scheme’s investment objective of outperforming the market in the long term.

How to invest in Bajaj Finserv Large Cap Fund NFO

Investors can purchase units at the face value of Rs. 10 during the NFO period (till August 12th, 2024). Once the NFO window closes, the fund will reopen for subscription within a few business days. At that time, investors can purchase units at the applicable Net Asset Value at the time of purchase. The NAV is determined by the performance of the underlying securities in the portfolio (among other factors). So, the NAV can rise or fall from one day to the next.

The minimum investment amount is Rs. 500 and you can use both lumpsum and SIP to invest. You can invest offline or online through Bajaj Finserv AMC. To invest online, visit www.bajajamc.com and click on the login/register tab on the home page. You can also visit the Bajaj Finserv Large Cap Fund scheme page and click on ‘Invest Now’.

Existing Bajaj Finserv AMC investors can log in with their PAN details, while new investors can sign up by providing their PAN, identity details and bank account information.

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.

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