Why Choose Bajaj Finserv Multi Asset Allocation Fund for Your Investment?

Looking for an investment avenue that offers stability, growth, and tax benefits? Look no further than the Bajaj Finserv Multi Asset Allocation Fund. This investment scheme is tailored to meet the diverse needs of investors, offering a host of benefits that make it a suitable choice for anyone looking to grow their wealth.

• Table of contents

• What is Bajaj Finserv Multi Asset Allocation Fund?
• Key Features of Bajaj Finserv Multi Asset Allocation Fund
• How Bajaj Finserv Multi Asset Allocation Fund Works
• Benefits of Investing in Bajaj Finserv Multi Asset Allocation Fund
• Taxation of Bajaj Finserv Multi Asset Allocation Fund
• Who Should Invest in Bajaj Finserv Multi Asset Allocation Fund?
• How to Invest in Bajaj Finserv Multi Asset Allocation Fund
• Bajaj Finserv Multi Asset Allocation Fund: Optimising Growth Potential with Dividend-Yield Investing

What is Bajaj Finserv Multi Asset Allocation Fund?

The Bajaj Finserv Multi Asset Allocation Fund is a hybrid mutual fund that invests across different asset classes for diversification and potentially better risk-adjusted returns. The fund dynamically invests in equity, debt, gold, and other assets based on market conditions and spreads investments across asset classes to reduce portfolio risk.

Key features of Bajaj Finserv Multi Asset Allocation Fund

One of the standout features of the Bajaj Finserv Multi Asset Allocation Fund is its focus on high dividend-paying companies. By investing in companies with a proven track record of dividend payouts, the fund not only seeks potential growth but also signals stability and reliability in the businesses it invests in. This approach provides investors with the opportunity to participate in the established companies while enjoying regular income in the form of dividends.

Other features:

Multi-asset allocation: The fund invests in equity, debt, gold, and other assets, adjusting based on market conditions.

Diversification: Helps reduce portfolio risk by spreading investments across asset classes.

Professional management: A team of investment professionals manages the fund.

Growth and stability: Aims to balance growth (equities) and capital preservation (debt and gold).

How Bajaj Finserv Multi Asset Allocation Fund works

1. Asset allocation: The fund manager adjusts allocations based on market conditions and investment goals.

2. Dynamic adjustments: Allocation changes according to market trends and the fund manager’s analysis.

3. Professional management: Expert managers make investment decisions based on in-depth market analysis.

4. Balance of growth and relative stability: Aims to combine growth from equities with relative stability from debt and other assets.

Benefits of investing in Bajaj Finserv Multi Asset Allocation Fund

Diversification: Spreads investments across multiple asset classes (equities, debt, gold) to mitigate the impact of underperforming assets. Helps mitigate volatility, making investments less vulnerable to market downturns.

Convenience: Invest in one fund that handles diversification, reducing the need for multiple investments. Manage a single fund instead of tracking several individual investments.

Professional management: Fund managers make decisions based on market analysis and continuously adjust the portfolio. Professional management can lead to better returns compared to self-directed investments.

Cost efficiency: Investing in a single fund reduces transaction costs compared to individual investments.

Access to diverse markets and sectors: Multi-asset funds provide access to a wide range of assets and markets, potentially enhancing returns. Many funds rebalance automatically to align with risk tolerance and investment goals.

Taxation of Bajaj Finserv Multi Asset Allocation Fund

Like any other fund in this category, the taxation of the Bajaj Finserv Multi Asset Allocation Fund would depend on the holding period and the proportion of equity and debt in the portfolio.

Investors in the Bajaj Finserv Multi Asset Allocation Fund can also benefit from equity taxation on their investments.

With favourable tax treatment for equity investments, investors have the potential to optimize their overall returns and enhance their wealth creation journey. This can make it a suitable option for those looking to optimize their investment gains.

Who should invest in Bajaj Finserv Multi Asset Allocation Fund?

The Bajaj Finserv Multi Asset Allocation Fund is suitable for investors who:

Seek diversification: Provides a diversified portfolio across various asset classes, reducing overall risk.

Prefer professional management: Ideal for investors who prefer leaving decisions to experienced fund managers.

Have a medium to long-term investment horizon: Designed for long-term investment, typically 5-7 years or more.

Want a balanced approach: Balances growth potential with stability, appealing to those focused on both returns and capital preservation.

How to invest in Bajaj Finserv Multi Asset Allocation Fund

Here’s a step-by-step guide to investing in the Bajaj Finserv Multi Asset Allocation Fund:

1. Choose a platform: Invest through online platforms. Alternatively, invest directly via the Bajaj Finserv Asset Management Company website. For personalized guidance, consult a SEBI-registered investment advisor.

2. Open a Demat and trading account (if required): You’ll need a Demat and trading account for online investments. Most platforms offer both.

3. Complete KYC verification: Submit necessary documents like PAN and Aadhar card to complete the Know Your Customer (KYC) process.

4. Choose the fund: Select the Bajaj Finserv Multi Asset Allocation Fund.

5. Invest: Choose between a lump sum investment or a Systematic Investment Plan (SIP), where you invest a fixed amount periodically.

Bajaj Finserv Multi Asset Allocation Fund: Optimising Growth Potential with Dividend-Yield Investing

Dividend-yield investing

A dividend is a payment made by a company to its shareholders, usually in the form of cash or additional shares of stock. It represents a portion of the company's profits that is distributed to its shareholders.

Dividend yield represents the annual dividend a company pays relative to its stock price and is calculated by dividing the annual dividend per share by the current stock price.

In its dividend-yield investing approach, Bajaj Finserv Multi Asset Allocation Fund will focus on stocks or securities that have typically offered higher dividend yields than the Nifty 50 index. These dividends will be reinvested to purchase additional units. This, in turn, will increase opportunities for compounding growth.

Compounding is the process where the potential returns on an investment are reinvested to generate additional earnings over time. This can potentially have a snowball effect and result in significant growth over the long term.

The fund will allocate 35% to 80% of its portfolio to equity. While crafting the portfolio, fund managers will also focus on companies with healthy balance sheets, stable business models and a track record of consistent performance. This may help create a portfolio that is relatively resilient to volatility and with optimised long-term growth potential.

The equity portion will also follow a multi-cap, multi-sectoral and multi-theme approach. This can further optimise return potential while mitigating against the risk of over-concentration in one segment.

Hedging against volatility

The scheme will also allocate 10% to 55% of its portfolio to debt securities and money market instruments to add relative stability to the portfolio. The debt segment of the portfolio will follow a dynamic duration management strategy, which involves adjusting the underlying duration of the securities in the portfolio in response to interest rate changes. This strategy can mitigate risk and leverage various interest rate environments.

The commodities segment will comprise 10% to 55% of the portfolio and will provide exposure to gold ETFs, silver ETFs, and exchange-traded commodity derivatives. This part of the portfolio can potentially act as a hedge against the volatility of equity. It may also contribute to the portfolio’s growth potential in certain market conditions.

The fund may also allocate 0% to 10% to REITs/InvITs.

The portfolio will be dynamically managed, meaning that fund managers can flexibly alter the asset allocation pattern in response to market movements. However, under normal circumstances, the scheme will seek to allocate more than 65% of its assets to equity to optimise growth potential and benefit from equity taxation.

Conclusion

In summary, the Bajaj Finserv Multi Asset Allocation Fund offers a suitable investment proposition for those seeking stability, growth, and tax efficiency. With its focus on high dividend-paying companies, diversification across asset classes, equity taxation benefits, and adaptability to different market conditions, the fund provides investors with a comprehensive solution for wealth creation. Whether you're a seasoned investor or just starting out, consider adding the Bajaj Finserv Multi Asset Allocation Fund to your investment portfolio for a smoother and more rewarding investment journey in long term. For a detailed scheme information, visit the scheme page.

FAQs

What is the minimum investment required for the Bajaj Finserv Multi Asset Allocation Fund?

The Bajaj Finserv Multi Asset Allocation Fund requires a minimum investment of Rs 500 for both lump sum and SIP.

What are the tax implications of investing in the Bajaj Finserv Multi Asset Allocation Fund?

Investors in the Bajaj Finserv Multi Asset Allocation Fund may benefit from equity taxation on their investments. This allows for optimized returns and supports long-term wealth creation.

How is the Bajaj Finserv Multi Asset Allocation Fund different from an equity fund?

The Bajaj Finserv Multi Asset Allocation Fund stands out from traditional equity funds through its diversified investment strategy, including equities, debt, gold, and other asset classes, reducing portfolio risk. While equity funds focus solely on stocks, often with higher volatility, multi-asset funds balance risk and return, offering greater stability.

Can I invest in the Bajaj Finserv Multi Asset Allocation Fund through SIP?

Yes, the Bajaj Finserv Multi Asset Allocation Fund allows investments through a Systematic Investment Plan (SIP), offering benefits like rupee cost averaging, disciplined investing, and compounding growth. The minimum SIP amount is Rs 500.

Is the Bajaj Finserv Multi Asset Allocation Fund suitable for retirement planning?

The Bajaj Finserv Multi Asset Allocation Fund can be a potential option for retirement planning, especially for long-term goals with a 5-10 year horizon. Key considerations include risk tolerance, investment goals, and how the fund fits within a diversified retirement portfolio.

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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.