Bajaj Finserv Asset Management Limited, a subsidiary of Bajaj Finserv Limited, has launched a new fund offer (NFO) for its Bajaj Finserv Large and Mid Cap Fund. The NFO period is from February 6, 2024 to February 20, 2024. The fund is an open-ended equity scheme that aims to generate long-term capital appreciation by investing in a diversified portfolio of equity and equity related securities, predominantly in large and mid-cap stocks from various sectors.
What is moat-based investing?
The fund distinguishes itself by adopting a moat-based investing strategy, which involves identifying and investing in companies with economic moats, or sustainable competitive advantages. This concept, popularized by Warren Buffett, emphasizes finding companies with strong and defensible market positions that can shield them from competition and enable them to generate robust profits.
Some of the factors that can create economic moats for a company are:
- Brand strength: A strong brand name can create customer loyalty, pricing power, and differentiation from competitors.
- Network effects: A network effect occurs when a product or service becomes more valuable as more people use it, creating a positive feedback loop that attracts more users and customers.
- Cost advantages: A cost advantage can arise from economies of scale, operational efficiency, or access to cheaper inputs or resources.
- Regulatory advantages: A regulatory advantage can result from favorable government policies, licenses, patents, or other barriers to entry that protect a company from competition.
Why invest in Bajaj Finserv Large and Mid Cap Fund?
Bajaj Finserv Large and Mid Cap Fund offers investors the following benefits:
- Risk mitigation: Companies with economic moats are often more resilient to economic downturns and market fluctuations, as they have the ability to maintain or increase their market share and profitability.
- Consistent performance: Moat-based investing aligns with a long-term perspective, as the underlying companies possess enduring competitive strengths that can support their growth and value creation over time.
- Quality over quantity: Moat-based investing focuses on the quality of companies rather than chasing short-term trends or fads. This approach favors businesses with sustainable competitive advantages that can deliver superior returns on capital.
- Potential for growth: Companies with economic moats often have the potential for steady and sustainable growth, as they have the capacity to innovate, expand, and capture new opportunities in their markets.
How to invest in Bajaj Finserv Large and Mid Cap Fund?
Investors can invest in Bajaj Finserv Large and Mid Cap Fund through lump sum or systematic investment plan (SIP) modes. The minimum application amount for lump sum is Rs. 500 and in multiples of Re. 1. The minimum application amount for SIP is Rs. 500 and above with minimum 6 instalments.
The fund is managed by Mr. Nimesh Chandan (Chief Investment Officer), Mr. Sorbh Gupta (Senior Fund Manager – Equity), and Mr. Siddharth Chaudhary (Senior Fund Manager – Fixed Income).