Bajaj Finserv launches its first equity fund, Bajaj Finserv Flexi Cap Fund NFO. This open-ended fund offers investment opportunities across a range of market caps, including large, mid and small caps. Over the past five years, several FlexiCap mutual fund schemes have generated annualized returns of up to 18%. Given these factors, should I consider investing in Bajaj Finserv FlexiCap NFO? Additionally, understand the risk factors an investor should consider before investing in such a FlexiCap fund. It is important to
Bajaj Finserv Flexi Cap Fund – NFO Issue Details
Learn more about NFOs here.
| NFO open | July 24, 2023 |
| NFO Closing | August 7, 23 |
| Schemes for continuous purchases/sales are reopened | Within 5 business days |
| Minimum application amount | 500 rupees, thereafter in multiples of 1 rupee |
| Minimum SIP | 100 rupees for 6 months |
| NAV of the fund | 10 rupees during NFO period |
| entry road | Nothing |
| end of load | For units over 10% of the investment amount, 1% will be charged for redemption within 180 days. |
| dangerous | very high risk |
| standard | S&P BSE 500 Tri |
| fund manager | Nimesh Chandan Sorbu Gupta Siddharth Chowdhury |
Bajaj Finserv Flexi Cap Fund SID Prospectus
What is the investment objective of Bajaj Finserv Flexi Cap Fund NFO?
We generate long-term capital growth by investing primarily in equities and equity-related products across the entire market capitalization.
However, there is no guarantee that the investment objective of the scheme will be achieved..
What is the allocation pattern of this fund?
The investment pattern of this fund is as follows:
| instrument type | minimum% | maximum% | risk profile |
|---|---|---|---|
| Large-cap, mid-cap, and small-cap stocks and equity-related products | 65% | 100% | very expensive |
| Other stocks and related products | 0% | 35% | very expensive |
| Debt securities and money markets Products (including securitized bonds) |
0% | 35% | low to moderate |
| Units issued by REITs and InvITs | 0% | Ten% | medium height |
Why invest in Bajaj Finserv Flexi Cap Fund NFO
Here are some reasons to invest in this fund.
Diversification: The Flexi Cap Mutual Fund offers investors a diversified portfolio of equities across different sectors and market capitalizations. This strategy helps spread investment risk and reduce the impact of market volatility.
Higher Earning Potential: Flexi Cap Funds have the flexibility to invest in companies of varying market capitalization, potentially generating higher returns compared to focusing on a specific market segment.
Flexibility: Flexi Cap funds have the advantage of flexibility, allowing fund managers to adjust portfolio composition based on market conditions. This allows you to take advantage of market opportunities and optimize your bottom line.
Alignment with market trends: The fund’s inherent flexibility enables investors to take advantage of new investment opportunities by responding quickly to changing market trends.
Key risk factors to consider before investing in such funds
You should consider some of these risk/negative factors before investing.
Volatility: As the Flexi Cap Fund invests in companies of all market capitalizations, it is subject to market volatility, which may impact returns in the short term.
Increased risk: Compared to large- and mid-cap funds, FlexiCap funds carry relatively higher risk due to their exposure to small-cap and unverified companies.
Liquidity risk: Because the Flexi Cap Fund invests in small-capitalization stocks, it may face higher liquidity risk. Selling such shares in a volatile market can create challenges in terms of liquidity.
High-risk equipment: This fund includes investments in REITs and InvITs, which are considered riskier investment vehicles. 5) Investors should read the Scheme Information Document (SID) for the full risk factors of the Scheme.
How are the existing Flexi Cap funds performing in India?
Below is a list of FlexiCap mutual funds and their short-, medium-, and long-term performance.
| scheme name | 3 years | 5 years | 10 years |
|---|---|---|---|
| Quant Flexi Cap Fund | 39% | twenty two% | twenty three% |
| Parag Palik Flexicap Fund | 27% | 19% | 19% |
| PGIM India Flexi Cap Fund | 28% | 18% | – |
| HDFC Flexi Cap Fund | 33% | 17% | 17% |
| JM Flexi Cap Fund | 28% | 16% | 18% |
| Kanara Robeco Flexi Cap Fund | twenty four% | 15% | 16% |
| Union Flexicap Fund | 26% | 15% | 14% |
| DSP Flexi-Cap Fund | twenty four% | 15% | 17% |
| Nabi Flexi Cap Fund | twenty five% | 15% | – |
| Edelweiss Flexicap Fund | 27% | 14% | – |
| Franklin India FlexiCap Fund | 29% | 14% | 17% |
| IDBI Flexi Cap Fund | twenty five% | 13% | – |
| SBI Flexicap Fund | twenty four% | 13% | 18% |
| Kotak Flexicap Fund | twenty two% | 13% | 18% |
| Aditya Birla Sun Life Flexi Cap Fund | twenty four% | 13% | 18% |
| Axis FlexiCap Fund | 19% | 13% | – |
| UTI Flexi Cap Fund | twenty one% | 12% | 15% |
| HSBC Flexi Cap Fund | twenty four% | 12% | 16% |
| LIC MF Flexi Cap Fund | 19% | 12% | 12% |
| Bandhan Flexi Cap Fund | twenty two% | Ten% | 15% |
| Taurus Flexi Cap Fund | 18% | 7% | 11% |
| Motilal Oswal Flexi Cap Fund | 15% | 7% | – |
Should I invest in Bajaj Finserv Flexi Cap Fund NFO?
The Bajaj Finserv Flexi Cap Fund NFO invests in stocks of different market caps: large cap, mid cap and small cap.
The large-cap component offers stable returns, while the mid-cap and small-cap segments have the potential to generate higher returns. Such funds help diversify an investor’s portfolio.
On the other hand, exposures to the mid and small cap segment should be considered high risk. There have been a few flexicap mutual funds with annualized returns of just 4.5% over the past five years, and very few have fallen short of bank FD returns. Therefore, there is no guarantee that this new fund offer will yield high returns. Bajaj FinServ has also just entered the mutual fund industry and is the first equity fund to be launched today.
High-risk investors who want to try out new funds can invest in this scheme for a period of 5 years or more. Otherwise, you can invest in existing FlexiCap mutual funds that have already proven themselves in various market cycles.
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Suresh KP is the founder of Myinvestmentideas. He is his NISM Certified – Investment Advisor and he is a NISM Certified – Research Analyst. He has been analyzing financial markets for the past 20 years. He can be reached at suresh@myinvestmentideas.com.
