All you need to know about Bajaj Finserv Large Cap Fund

Bajaj Finserv AMC’s latest equity scheme, the Bajaj Finserv Large Cap Fund, offers investors a unique opportunity to tap into India’s growth story. Investing in the country’s industry leaders, the fund seeks to create the potential for long-term wealth creation with relative stability.

With its focused strategy and high active share, the fund seeks to set itself apart from its benchmark index and other funds in this space and create the potential to outperform the market in the long term.

Here’s a look at the fund’s unique features, investment strategy, and what it can potentially offer to investors.

• Table of contents

1. What is a large cap fund?
2. Features of Bajaj Finserv Large Cap Fund
3. High-conviction stock selection
4. High active share
5. Emerging opportunities for large cap funds
6. Advantages of large cap funds
7. How to invest in Bajaj Finserv Large Cap Fund
8. Conclusion

What is a large cap fund?

First, let’s understand what large cap funds are. Large cap funds are mutual funds that primarily invest in the country’s biggest companies in terms of market capitalisation. These are the top 100 companies listed on the stock exchange. Large cap stocks typically belong to well-established companies with strong financials, competitive advantages and a track record of good performance. As a result, large cap stocks tend to be less risky than small and mid-cap stocks, as they are more resilient and less susceptible to volatility. Moreover, they offer significant capital appreciation potential in the long term.

Features of Bajaj Finserv Large Cap Fund

The Bajaj Finserv Large Cap Fund follows a distinct investment strategy, with a focused portfolio comprising 25-30* stocks that represent some of India’s top-performing companies. These are companies that are expected to play a key role in India’s anticipated rapid growth on the global stage. With India poised to become on the world’s largest economies in coming years, large cap companies can potentially witness significant growth and access to global markets.

High-conviction stock selection

The fund’s focused portfolio will centre on high-conviction stocks. These are stocks that, according to fund managers, show positive prospects for long-term growth. fund managers feel strongly about, based on research and analysis. Fund managers will carefully analyse and handpick stocks belonging to companies with strong fundamentals, market leadership and long-term growth potential. This focused approach can give the fund the potential to outperform its benchmark over the long term.
Limiting the portfolio to 25-30 companies will also give fund managers the flexibility to invest in companies that they have the most

High active share

Along with this focused portfolio, the fund will also seek to maintain a high active share. Active share is a measure of how much a mutual fund’s holdings deviate from its benchmark index. A high active share indicates that the fund’s portfolio is significantly different from the benchmark, reflecting the fund manager’s active involvement in selecting stocks.
Funds with high active shares seek to outperform the benchmark in the long-term. Because of their divergence from the index, their performance is less tied to that of the broader market, and they have greater scope to leverage market opportunities or mitigate risk during downturns. This approach allows the Bajaj Finserv Large Cap Fund to optimise return potential by strategically selecting stocks that may not be heavily weighted in the index but show attractive long-term growth prospects.

Emerging opportunities for large cap funds

As India’s economy continues to grow, and large-cap stocks are strategically positioned to potentially benefit from this expansion. As industry leaders, these companies have the resources and market presence to tap into growth opportunities. Moreover, compared to the more mature giants of developed companies, large cap companies in India have greater scope for expansion on the global stage.

Additionally, large-cap stocks have historically shown resilience during market downturns. Their large scale makes them better able to withstand volatility and weather downturns. They also tend to attract greater inflows from foreign investors. A recent study by Bajaj Finserv showed that historically#, large cap stocks have fallen less sharply and showed quicker recovery than mid-cap and small-cap stocks during market downturns. Moreover, they have also shown better growth than small and mid caps during narrow and flat markets (#past performance may or may not be sustained in the future).

Moreover, large-cap stocks are currently trading near their fair valuation, making this an attractive time for long-term investors to consider entering the market.

Advantages of large cap funds

Large-cap funds offer several benefits that make them a compelling option for investors. Here are some key advantages:

1. Relative stability: Large-cap companies are often more stable compared to smaller firms. Due to their size, strong fundamentals, and established market position, they are typically less affected by short-term market fluctuations.
2. Growth potential: While large-cap companies may not have the same rapid growth potential as smaller companies, they typically offer relatively steady return potential over the long term. If companies continue to show relatively consistent growth, supported by their strong earnings and market leadership, investors can have a relatively smooth investing experience.
3. Dividend income potential: Large cap companies often have a record of paying regular dividends to shareholders. These dividends can potentially provide a steady income stream. Reinvesting dividends can also help enhance the overall returns of the fund over time.
4. High liquidity: Large-cap stocks are among the most liquid on the market, meaning they can be easily bought and sold without significantly affecting the stock price. This can give investors greater flexibility in managing their investments and accessing their funds if needed.

How to invest in Bajaj Finserv Large Cap Fund

You can invest in the Bajaj Finserv Large Cap Fund in lumpsum or through a Systematic Investment Plan (SIP). The minimum investment amount is Rs. 500.

To invest online through Bajaj Finserv Asset Management Ltd., you can go the home page of www.bajajamc.com and click on login/register at the top of the page. You can also go the Bajaj Finserv Large Cap Fund scheme page and click on Invest Now. Then, you will directed to the investor portal and guided through a quick and simple investment process. You can also invest offline through Bajaj Finserv AMC.

Additionally, you can invest through authorized distributors, aggregator platforms, or through KFintech.

Read also: Benefits of Investing in Large-Cap Funds

Conclusion

The Bajaj Finserv Large Cap Fund offers investors an opportunity to invest in some of India’s most established companies. With its focused portfolio, high-conviction stock selection and high active share, the fund seeks to potentially outperform its benchmark over the long term. For investors seeking relative stability, long-term growth potential, and a chance to participate in India’s economic growth, the Bajaj Finserv Large Cap Fund can be a suitable investment option.

*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.
This document should not be treated as endorsement of the views/opinions or as investment advice. This document should not be construed as a research report or a recommendation to buy or sell any security. This document is for information purpose only and should not be construed as a promise on minimum returns or safeguard of capital. This document alone is not sufficient and should not be used for the development or implementation of an investment strategy. The recipient should note and understand that the information provided above may not contain all the material aspects relevant for making an investment decision. Investors are advised to consult their own investment advisor before making any investment decision in light of their risk appetite, investment goals and horizon. This information is subject to change without any prior notice.