Diversify your investment portfolio with equity, debt, and gold

Equity, debt, gold, and silver have each had their shining moments, offering investors diverse opportunities for growth. Imagine a fund that taps into the power of all these asset classes, thereby providing growth along with diversification.

Introducing Bajaj Finserv Multi Asset Allocation Fund with DIVIDEND BOOSTERS.
Get growth from high dividend paying companies and stability from debt and gold.

Table of contents

• Benefits of investing in Bajaj Finserv Multi Asset Allocation Fund
• Who should invest?
• Bajaj Finserv Multi Asset Allocation Fund strategy
• How to invest?
• Benefits of Diversifying with Equity, Debt, and Gold Investments
• Risks Associated with Equity, Debt, and Gold Investment

Benefits of investing in Bajaj Finserv Multi Asset Allocation Fund

• Invests in high dividend paying growth-oriented companies.
• Navigates market volatility through diversification.
• Provides equity taxation benefits on investments.
• Versatile across market conditions.

Read Also: Inflation protection strategies: How to position your portfolio with equity and debt funds?

Who should invest?

This fund is suitable for investors who:

• Desire low volatility vis-à-vis pure equity funds.
• Seek professional asset allocation.
• Aim to achieve potential returns in the long term.
• Are venturing into equity investment for the first time.

Bajaj Finserv Multi Asset Allocation Fund strategy

Equity allocation:

• Dividend opportunities: Selects companies with high dividend payouts and growth.
• Sustainability: Monitors payout ratios, earnings coverage, and financial health, focusing on consistent dividend growth and sustainable payout ratios.
• Growth focus: Prioritizes companies with long-term growth potential and stable income streams.
• Reinvestment strategy: Reinvests dividends for compounding returns.

Debt allocation:

• Short to medium-term investment to capitalize on lucrative yields throughout the interest rate cycle.
• During interest rate hikes: Locks in higher yields for increased income flow.
• During interest rate cuts: May enhance fund performance with better mark-to-market gains.

Read Also: Hybrid Funds: Asset Allocation Strategy and Role in Portfolio Diversification

Gold allocation:

It aims to protect your money from negative factors like inflation and currency devaluation. By adding gold to the mix, this scheme seeks to create an extra layer of stability for your investment journey.

How to invest?

1. Login/Sign-up
2. If prompted, complete your KYC journey/modification.
3. Provide your basic details such as PAN, DOB, name, and bank details.(For first-time investors)
4. Input the OTP sent to your registered mobile number and/or email address.
5. Choose between Lumpsum or SIP based on your investment preference.
6. Proceed with your investment.

In a world where financial markets are constantly evolving, Bajaj Finserv Multi Asset Allocation Fund seeks to offer consistent stability and growth in the long-run through its diversified investment approach.

Source of the above table: ICRA MFI, Internal.

Benefits of Diversifying with Equity, Debt, and Gold Investments

Diversifying across equity, debt, and gold/silver investments helps balance potential risk and return by spreading exposure across asset classes that may respond differently to market conditions. Each can play a distinct role in an investor’s portfolio, potentially contributing to long-term wealth-building and enabling relatively steady performance through economic cycles.

Key benefits include:

• Reduced portfolio volatility: Equity, debt, and commodities such as gold and silver often move differently in response to market changes. When one asset class underperforms, another may offset the impact, leading to relatively stable overall returns.
• Balanced risk exposure: Equity funds may offer potential long-term growth, debt funds provide relatively stability, and gold may act as a hedge against inflation or during periods market uncertainty. Silver may provide diversification and exposure to potential growth, though its prices can be more volatile than gold due to its industrial demand.
• Improved liquidity and flexibility: Mutual fund options across these asset classes offer easy entry and exit, enabling investors to rebalance their portfolio based on changing goals and market conditions.
• Navigating different market cycles: Each asset class performs differently across economic phases. For instance, equities may benefit from growth cycles, while debt and gold may add relative stability during slowdowns or volatility.

Risks Associated with Equity, Debt, and Gold Investment

• Equity investment risks: Equity funds invest in company shares, which are sensitive to market movements, corporate earnings, and broader economic factors. Price fluctuations can be sharp in the short term, making them suitable only for investors with a high risk appetite and a long-term horizon.
• Debt investment risks: Debt funds face credit risk (possibility of a borrower defaulting), interest rate risk (fall in bond prices when interest rates rise), and liquidity risk (difficulty selling securities during tight market conditions). Though relatively less volatile than equities, they are not risk-free.
• Gold investment risks: Gold prices can be influenced by global economic trends, currency fluctuations, and investor sentiment. While gold may offer diversification benefits, it can also underperform during periods of strong equity or economic growth.

FAQs:

What is the right mix of equity, debt, and commodities for my portfolio?

There is no single suitable mix for everyone. The allocation among equity, debt, and commodities depends on factors such as financial goals, risk appetite, and investment horizon. A diversified approach may help balance potential returns with risk. Investing in a multi asset allocation fund may also be a suitable approach, as you get access to all three assets in a professionally managed portfolio, removing the need to independently make adjustments in response to market movements.

What are the risks involved in investing in equity, debt, gold and silver?

Equity investments face market volatility and business performance risks. Debt carries credit and interest rate risks, while gold is affected by global demand and currency movements. Silver tends to be more volatile than growth because of its link to inudstrial demand. Diversifying across these assets may help reduce overall portfolio impact, though it does not eliminate potential losses.

How does diversification among equity, debt, and gold help my investments?

Diversification helps balance potential gains and losses across asset classes. When one asset underperforms, another may provide relative stability. This approach may reduce the overall impact of market volatility on the portfolio and support more consistent long-term growth potential.

Can I invest in equity, debt, gold and silver through a single mutual fund?

Yes, investors may consider multi asset allocation funds, such as the Bajaj Finserv Multi Asset Allocation Fund, which invests in a mix of equity, debt, and commodities such as gold and silver. These funds maintain exposure to multiple asset classes and rebalance periodically as per market conditions, helping investors achieve diversification through a single investment.

What is the role of gold in a portfolio that also has equity and debt?

Gold acts as a diversifier in a portfolio dominated by equity and debt. Its performance often moves differently from financial markets, which may help cushion the impact of volatility. It can serve as a relatively steady component in times of market uncertainty or currency weakness.

How to invest in Bajaj Finserv Multi Asset Allocation Fund?

You can invest in Bajaj Finserv Multi Asset Allocation Fund through the Bajaj Finserv AMC website, registered distributors, or online investment platforms. Investors may choose SIP or lumpsum modes. To invest offline, you can fill out the application form and submit it at an official point of acceptance (OPAT). Before investing, review the Scheme Information Document (SID) and assess suitability based on goals and risk appetite.

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