All you need to know about Bajaj Finserv Multi Asset Allocation Fund

The New Fund Offer period for Bajaj Finserv Asset Management’s newly launched Bajaj Finserv Multi Asset Allocation Fund ended on May 27th, 2024. The fund will reopen for subscription on or before June 6th, 2024. Thereafter, units can be purchased at the day’s Net Asset Value at the time of investing.

Here’s everything you need to know about Bajaj Finserv Multi Asset Allocation Fund.

Diversified portfolio

This fund gives investors a diversified portfolio with exposure to at least three different asset classes, including equity, debt, and commodities. Equipped with growth and dividend boosters for its equity portion, the fund seeks to balance long-term growth potential with risk mitigation.

Investment strategy and approach

The Bajaj Finserv Multi Asset Allocation Fund employs a dividend-yield investing strategy for the equity segment, which will comprise 35% to 80% of its portfolio.

This strategy involves focusing on companies that offer higher dividend yields than the Nifty 50 index. These dividends, when reinvested, can offer enhanced opportunities for compounding, which can increase the fund’s growth potential in the long term.

Within high-dividend-yielding firms, the scheme will focus on companies with a history of stable growth and sustainable business models. This can potentially maintain relatively low volatility in the portfolio.  It will also follow a multi-cap, multi-sector and multi-theme strategy to optimise growth potential and mitigate the risk of overconcentration in any one segment.

Bajaj Finserv Multi Asset Allocation fund is India’s first multi-asset allocation scheme to follow a high-dividend-yield investing strategy.

Role of debt and gold

The fund’s portfolio will be dynamically managed, allowing for flexible adjustments in the allocation between equity, debt, and gold based on prevailing market conditions. However, it will maintain an equity-heavy allocation under normal circumstances to leverage growth potential and favourable taxation.

The debt component of the fund will comprise 10% to 55% of the portfolio and will seek to add relative stability to the portfolio. Fund managers will follow a dynamic duration management strategy for the debt component of the scheme. This involves adjusting the underlying portfolio duration in response to changing interest rate environments and market conditions. This can help the scheme potentially leverage different interest rate scenarios.

In the commodities segment, which will comprise 10% to 55% of the portfolio, the fund will invest in gold and silver ETFs, aiming to hedge against equity market volatility while providing growth potential. Additionally, the fund may allocate 0% to 10% of its assets to real estate investment trusts (REITs) and infrastructure investment trusts (InvITs), further diversifying the portfolio.

Investors seeking to combine the growth potential of equities with the stability of debt and the hedging benefits of commodities can consider starting an SIP in the Bajaj Finserv Multi Asset Allocation Fund.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

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