Investing in mutual funds can help in building wealth over time. If you`re looking to invest in a mutual fund scheme that aims to balance risk and rewards, a multi cap fund could be a suitable choice for you. Bajaj Finserv AMC has launched the Bajaj Finserv Multi Cap Fund and the NFO period commenced on Thursday, February 6, 2025. The NFO period of this scheme ends on Thursday, February 20, 2025. This fund comes with a unique contrarian investing strategy, and it could be a suitable addition to your investment portfolio, especially if you`re thinking about growing your wealth over the long term.
In this article, we`ll explore why a Systematic Investment Plan (SIP) in the Bajaj Finserv Multi Cap Fund can help you in long-term wealth creation, and we will also touch upon the benefits of the fund’s contrarian investment approach.
Understanding multi cap funds
Before understanding the benefits of starting an SIP in the Bajaj Finserv Multi Cap Fund, let`s first look at what multi cap funds are and how they work.
A multi cap fund is a type of equity mutual fund that invests in companies across various market capitalization categories. These categories are typically divided into large cap, mid cap, and small cap companies with minimum 25% investment across large cap, mid cap and small cap respectively:
- Large cap companies are well established, relatively stable, and often market leaders in their industries.
- Mid cap companies are typically in the growth phase and could provide relatively better returns potential than large cap companies but come with slightly higher risk.
- Small cap companies are relatively newer and may have significant long term growth potential but carry the highest risk.
By investing in all three types of companies, a multi cap fund aims to provide investors with a diversified portfolio that balances the relative stability of large cap stocks with the long term growth potential of mid cap and small cap stocks. This diversification helps reduce the risk associated with investing in a single type of stock and potentially enhances returns over time.
What Makes Bajaj Finserv Multi Cap Fund Different?
Bajaj Finserv Multi Cap Fund follows a contrarian investing strategy. Contrarian investing involves going against the market trends. While most investors tend to follow popular trends or herd behaviour, contrarian investors take a different approach. They buy when the market is pessimistic and undervalued stocks are available, and they sell when the market is overly optimistic, leading to inflated stock prices.
This strategy can help investors capitalize on market corrections and downturns when stocks are trading at lower prices but have the potential to rise again once the market sentiment turns positive. Contrarian investing requires patience and a long-term outlook, making it a suitable strategy for those willing to weather short-term volatility in the hopes of achieving long-term growth.
Bajaj Finserv Multi Cap Fund, through its contrarian investing approach seeks to identify stocks that are undervalued, thus offering the potential for relatively better returns as the market corrects itself. By focusing on stocks that others may overlook, Bajaj Finserv Multi Cap Fund could help you tap into the opportunities that may often be missed by the crowd.
Benefits of investing in Bajaj Finserv Multi Cap Fund through SIP
One of the effective ways to invest in the Bajaj Finserv Multi Cap Fund is through a Systematic Investment Plan (SIP). Let’s explore why SIPs can be a suitable way to grow your wealth over time, especially in a fund like Bajaj Finserv Multi Cap Fund.
1. Rupee cost averaging
One of the key advantages of SIP is rupee cost averaging. When you invest a fixed amount regularly, regardless of the market’s ups and downs, you buy more units when prices are low and fewer units when prices are high. Over time, this strategy helps average out the cost of your investments. In volatile markets, this can be particularly helpful, as you are not making large lumpsum investments at potentially high prices.
For example, if you use an SIP yearly calculator, you can get a better understanding of how your investments will grow over time, showing you the potential benefits of rupee cost averaging. It helps you avoid the risk of timing the market and lets you focus on the long-term growth of your investment.
2. Discipline and consistency
An SIP encourages discipline and consistency in your investment strategy. When you commit to investing a fixed amount every month or year etc., it ensures that you are continually investing, no matter how the market is performing. This helps you build wealth over time by staying invested in both good and bad market conditions.
By starting an SIP in Bajaj Finserv Multi Cap Fund, you are systematically investing in a diversified portfolio, helping you stay on track with your financial goals. You don’t need to worry about market fluctuations or timing your investments – the SIP ensures that you remain consistent with your contributions.
3. Compounding power
The power of compounding is one of the most important factors for long-term wealth creation. When you invest regularly through an SIP, your returns are reinvested and start generating returns themselves. Over time, the compounding effect can result in significant wealth accumulation.
The longer you stay invested, the more you benefit from compounding. With the potential for long-term growth in Bajaj Finserv Multi Cap Fund, especially with its contrarian strategy, your investment could see reasonable returns over the years.
Affordability and flexibility
Another advantage of SIPs is that they are affordable and flexible. You can start with a small amount, depending on your budget, and gradually increase your contributions as your income grows. You can also choose the frequency of your SIP (monthly, quarterly, etc.), allowing you to align your investment strategy with your financial situation.
A SIP investments plan in the Bajaj Finserv Multi Cap Fund allows you to start small but grow your wealth consistently over time. Plus, with the flexibility of SIPs, you can increase or decrease your investment amounts as needed, giving you control over your investment journey.
4. Reduced risk
Since SIPs spread your investments over time, you are less likely to fall prey to market volatility. By investing steadily, you are exposed to less risk than making a one-time lumpsum investment at a particular market point. SIPs help reduce the impact of market highs and lows on your investment.
This is particularly important in a fund like Bajaj Finserv Multi Cap Fund, which takes a contrarian investing approach. By investing through SIP, you can ride out the market volatility, knowing that the fund’s strategy aims to identify undervalued stocks that could potentially yield significant returns in the long run.
How to get started with an SIP in Bajaj Finserv Multi Cap Fund
Individuals can invest directly through Bajaj Finserv AMC by visiting www.bajajamc.com. They can also invest through registered mutual fund distributors. Additionally, they can invest through aggregator platforms or through our Registrar and Transfer Agent KFintech. Both online and offline investment options are available.
To get a better understanding of how much you need to invest, you can use an SIP yearly calculator, which will show you the potential growth of your investments based on different monthly contributions, helping you plan your SIP investments accordingly.
Once you decide on your investment amount and frequency, you can set up your SIP and let it run automatically. Over time, you’ll begin to see your wealth grow as you benefit from the power of consistent investing and the potential growth of the Bajaj Finserv Multi Cap Fund.
To sum up, if you`re looking to grow your wealth over time in a diversified, thoughtful way, consider starting an SIP in Bajaj Finserv Multi Cap Fund today. With a well-planned SIP investments plan, you’ll be on your way to get closer to your financial dreams and mitigate the impact of market volatility.
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 purposes 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.
Bajaj Finserv Multi Cap Fund
(An open ended equity scheme investing across large cap, mid cap, small cap stocks)
