Turning Volatility Into Opportunity With SIP In Flexi Cap Fund

Market ups and downs are a part of investing. While volatility can be concerning, it also presents opportunities. One way in which investors can navigate such market fluctuations is through an Systematic Investment Plan (SIP) in Bajaj Finserv Flexi Cap Fund.

Through rupee-cost averaging, dynamic management and a megatrends investment approach, an SIP in Bajaj Finserv Flexi Cap Fund can help investors focus on the potential for long-term growth even as short-term market fluctuations take their course. Investing across large, mid and small cap stocks with a dynamically managed portfolio, the fund seeks to capitalise on growth opportunities across the market.

This article tells you more about the Bajaj Finserv Flexi Cap Fund, its megatrends strategy, and the advantages of SIPs in volatile markets.

• Table of contents

• How SIP helps during volatile markets
• Megatrends approach: Investing in long-term themes
• Understanding flexi cap funds
• Navigating volatility: The importance of consistency

How SIP helps during volatile markets

Investing through an SIP means investing a fixed amount at regular intervals, regardless of market conditions. This approach helps in managing market volatility through rupee cost averaging.

• When markets decline, the fund’s Net Asset Value (NAV) is lower, and an SIP investor gets more units.
• When markets rise, the NAV increases, and fewer units are purchased for the same investment amount.

Over time, this balances out the average cost per unit, reducing the impact of market fluctuations. Instead of trying to time the market, an SIP helps ensure regular investing without being influenced by short-term movements.

Megatrends approach: Investing in long-term themes

Another factor that can help the Bajaj Finserv Flexi Cap Fund navigate short-term volatility is its future-focused megatrends approach.

Megatrends are large-scale structural changes that can have a lasting impact on societies and economies. These trends can shape various sectors, creating potential investment opportunities across a vast spectrum. Such trends play out over years or even decades. This longevity can make them relatively resilient to short-term fluctuations as these trends have the potential to persist despite temporary ups and downs.

Identifying and investing in these megatrends before the rest of the market recognises them can give investors an early mover advantage and significant growth potential in the long term. Here are some of the key megatrends that the Bajaj Finserv Flexi Cap Fund focuses on:

1. Technological megatrends: AI, automation, and R&D-driven innovations are influencing industries worldwide. Companies leading and adopting these advancements can have favourable and lasting growth prospects.

2. Regulatory megatrends: Policies like Make in India and the Production-Linked Incentive (PLI) schemes can boost domestic production. Companies that align with these policies stand to benefit, and the fund looks for opportunities in these areas.

3. Economic megatrends: Themes such as China+1 strategy, rising de-globalization, and increasing domestic manufacturing are leading to shifts in trade and investment. The fund can allocate investments in businesses that adapt to these trends.

4. Nature megatrends: Environmental sustainability is gaining importance, and sectors like organic agriculture, eco-friendly packaging, and ESG-focused companies are experiencing higher demand. The fund considers such trends while making investment decisions.

5. Demographic megatrends: India’s growing middle class and youthful population are driving demand in sectors such as healthcare, consumer goods, and urban infrastructure. The fund looks for companies catering to these evolving needs.

6. Social megatrends: Changes in digital connectivity, health awareness, and convenience are influencing growth in areas like e-commerce, digital entertainment, and health tech. The fund evaluates opportunities in companies benefiting from these social shifts.

By following these megatrends, the Bajaj Finserv Flexi Cap Fund identifies investment opportunities across different industries and market segments.

Also Read: How SIP In Flexi Cap Funds Help Investors

Understanding flexi cap funds

Flexi cap funds may offer an advantage over some other fund categories when it comes to adaptability in varying market conditions. Such funds are dynamically managed, meaning that the fund manager can flexibly adjust the portfolio allocation to large, mid and small cap stocks in response to market conditions and subject to asset allocation mentioned in scheme information document. For instance, they may increase the large cap allocation during volatile times to mitigate downside risk or increase small and mid cap exposure in growth phases to capture upside potential. For investors, this means exposure to companies of different sizes and greater flexibility in managing market fluctuations.

Navigating volatility: The importance of consistency

Market movements can lead to uncertainty, but stopping investments during downturns may not always be beneficial. Historically*, markets go through cycles, and investments made during lower market levels can contribute to overall portfolio growth when markets recover. (*Past performance may or may not be sustained in future).

A mutual fund plan automates regular investments, allowing participation in different market phases without making frequent changes or worrying too much about day-to-day market movements. Investing regularly and staying invested over time can help you navigate market ups and downs more effectively.

You can consider investing in the Bajaj Finserv Flexi Cap Fund through both online and offline, directly through Bajaj Finserv Asset Management Ltd or through a mutual fund distributor. You can also invest through aggregator platforms and registered intermediaries. To invest in Bajaj Finserv Flexi Cap Fund and for statutory details of the scheme, visit the scheme details page.