NFO Alert: All you need to know about Bajaj Finserv Balanced Advantage Fund

The scheme opened for public subscription on November 24, 2023, and will close on December 08, 2023. The scheme re-opens for continuous sale and repurchase within five business days of the allotment date.

Q. What kind of mutual fund schemes is this?

This is an open-ended dynamic asset allocation fund. This product is suitable for investors seeking

• To generate wealth creation over the long term
• Dynamic asset allocation between equity and equity-related Instruments including derivatives, and fixed-income instruments.

Speaking on the launch of the product, Ganesh Mohan, CEO, Bajaj Finserv Asset Management, said, “Given that we are a new entrant, we have the opportunity of looking at things afresh. Our BAF is yet another example of that approach. Here, both behavioural sciences and financial insights are ‘balanced’, to help us make our investment decisions. Our unique investment philosophy (INQUBE) seeks to combine the Informative, Quantitative and Behavioural edge to generate alpha. While this forms the plank for almost all our products, it is in our Balanced Advantage Fund that one will really be able to see a more pronounced impact of our behavioural tools. I’m certain you will see many more behavioural sciences-based ideas and products being talked about in the industry in the near future.”

Q. What is the main objective of investing in this fund?

The scheme aims to harness the potential gains from equities while actively mitigating potential losses. This is achieved through dynamic portfolio management involving investments in equities and equity-related instruments, coupled with strategic use of debt, money market instruments, and derivatives to optimise overall performance.

Nimesh Chandan, CIO, Bajaj Finserv Asset Management, added, “The crowd is not always wrong. As a result, selling whenever the equity market rises and purchasing every time the market falls may not be the best asset allocation approach. It is critical to recognize where the crowd has overreacted in greed or fear and capitalize on that response. We have designed an asset allocation strategy based on the study of the fundamental as well as the behavioural cycle of the market. Fundamental analysis tools provide us with an assessment of the market’s fair value, while behavioural analysis techniques provide us with the change in market bias between bullish and bearish. When these indications are combined, they show whether the market has overreacted or underreacted in either way.”

Q. How may one invest in this scheme?

Investors can invest under the scheme with a minimum investment of ₹500 per plan/option and in multiples of Re 1. There is no upper limit for investment.

Under normal circumstances, the asset allocation of the scheme will be as follows:

Q. Are there similar mutual funds in the market?

To date, many mutual fund houses have launched many such similar funds.

Q. How will the scheme benchmark its performance?

The scheme benchmark would be the NIFTY 50 Hybrid Composite Debt 50:50 index. The composition of the aforesaid benchmark is such that, it is most suited for comparing the performance of the Scheme. The trustees may change the benchmark in the future if a benchmark better suited to the investment objective of the scheme is available.

Q. Are there any entry or exit loads to this scheme?

This scheme involves no “Entry Load”, which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load” would be calculated as under:

– If units are redeemed/switched out within six months from the date of allotment:

i) if up to 8% of units allotted are redeemed/switched out – Nil

ii) any redemption / switch-out of units in excess of 8% of units allotted – 1% of applicable NAV. 

– If units are redeemed/switched out after 6 months from the date of allotment, no Exit Load is payable. 

Q. Who will manage this scheme?

Nimesh Chandan and Sorbh Gupta would be looking after the “Equity” aspect of the fund while Siddharth Chaudhary would be looking after the “Debt” aspect of the fund.

Q. Does the fund contain any inherent risk?

The scheme involves “High Risk” as per the details mentioned in the Scheme Information Document and is best suited to investors willing to understand that their principal will be subject to high risk. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.

Milestone Alert!Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.

Updated: 24 Nov 2023, 06:38 PM IST