When it comes to investing, time can make all the difference. For equity mutual funds in particular, a long investing horizon is essential. This is because of the concept of compounding – a powerful phenomenon that potentially enables exponential growth over time.
To help investors tap into this long-term growth potential, Bajaj Finserv AMC has launched the Bajaj Finserv Multi Cap Fund. This equity mutual fund invests across market capitalisations – large cap, mid cap and small cap – to potentially harness the unique advantages of each segment over time.
It also follows a contrarian investment approach, seeking to tap into overlooked and undervalued opportunities before the market realises their potential.
The New Fund Offer period, when the fund is opened to investors for the first time, began on Thursday, February 6th, 2025, and is on till Thursday, February 20th, 2025.
This article tells you more about the Bajaj Finserv Multi Cap Fund and how it can be suitable for long-term growth-oriented investors.
Compounding is the process where the returns on your investment, when reinvested, potentially generate additional returns over time. The longer the investment horizon, the more pronounced the potential impact of compounding. A compound interest calculator can visualise this impact of time on your investments. Based on your investment amount and expected returns, this tool tells you how much your investment can potentially grow over different tenures.
Multi cap funds invest in a mix of large cap, mid cap, and small cap stocks, with at least 25% allocation to each market cap. Here are the features of each segment:
● Large caps: These are the top 100 listed companies on the stock exchange on the basis of market capitalisation. Such companies are typically well-established, with robust business models. Thus, they tend to be more resilient than smaller companies. This relative stability can help mitigate impact on the portfolio to some degree during market downturns.
● Mid caps: Mid cap companies, listed between 101 and 250 on the basis of market capitalisation, offer a balance between the relative stability of large cap stocks and the high growth potential of small cap stocks. They are typically at a stage where they have the potential for significant expansion but are not as unpredictable or volatile as smaller companies.
● Small caps: Small cap companies, listed 251 and beyond, offer the possibility of significant growth over time. Investing in small caps can result in potentially better higher returns compared with large caps and mid caps, especially in favourable market conditions. However, these companies do not have the strong track records or legacy of large caps, resulting in higher volatility and greater risk.
Winners in the market keep rotating among different segments and a long horizon allows more time for different market conditions to play out. For instance, in times of economic stability or slow growth, large cap companies tend to perform better because of their established market presence and consistent earnings potential. When the economy is witnessing strong growth, mid cap companies often benefit, as they are in the expansion phase of their business lifecycle. And in bull markets or periods of rapid economic recovery, small cap companies can see substantial gains potential as they have the most room to grow.
The Bajaj Finserv Multi Cap Fund seeks to tap into the unique opportunities offered by each market capitalization over time. A longer horizon allows the fund time to leverage these diverse opportunities. With disciplined exposure to each market capitalization, the fund will seek to harness long term growth potential and mitigate risk in varying market conditions.
Another cornerstone of the Bajaj Finserv Multi Cap Fund is its contrarian investing approach. Contrarian investing is a strategy that goes against popular market trends. Instead of following the crowd, contrarian investors look for opportunities in undervalued stocks. They believe that when most investors are pessimistic, it can create buying opportunities that the market eventually corrects. However, patience and time play a crucial role in this strategy, as a longer period is often required for the market to recognise the value of these overlooked opportunities.
During the NFO period (i.e. from February 6th, 2025, till February 20th, 2025), you can purchase units at the face value of Rs. 10. When the fund reopens for subscription, units will be available at the prevailing Net Asset Value.
You can invest either online or offline, through the following routes:
Through Bajaj Finserv AMC. To invest online, visit www.bajajamc.com
Through a registered mutual fund distributor
Through aggregators
Through our Registrar and Transfer Agent KFintech.
The minimum investment amount for both Systematic Investment Plan (SIP) and lumpsum is Rs. 500. You can also take the help of tools such as an SIP or lumpsum mutual fund calculator to plan your investment.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
Disclaimer: This content is part of a marketing initiative. No TNIE Group journalists were involved in the creation of this content.