Bajaj Finserv Multi Asset Allocation Fund NFO – Should you invest?

Bajaj Finserv mutual funds has launched Multi Asset Fund NFO now.  This mutual funds would invest in investment classes like equity, debt, gold, silver, REITs and InvITs. It also comes with dividend yield strategy. Some experts say such funds are good for diversification, while others say just avoid them. Should you invest in Bajaj Finserv Multi Asset Allocation Fund NFO? What are the various risk factors associated with such funds?

Bajaj Finserv Multi Asset Allocation Fund NFO – Issue Details

Fund Name Bajaj Finserv Multi Asset Allocation Fund
NFO Opens 13-May-24
NFO closes 27-May-24
Scheme reopens for continuous purchase/sale Within 5 working days
Minimum Application Amount Rs 500 and in multiples of Rs  1 thereafter
Minimum SIP Rs 500 for 6 months
NAV of the fund Rs 10 during NFO period
Entry Load Nil
Exit Load For units in excess of 30% of the investment, 1% will be charged for redemption Within 1 year
Risk Very High Risk
Benchmark NIFTY 50 TRI (65), NIFTY Short Duration Index (25), Domestic Price of Gold (10)
Fund Manager Nimesh Chandan
Sorbh Gupta
Siddharth Chaudhary
Vinay Bafna

Bajaj Finserv Multi Asset Allocation Fund SID

What is the investment objective of this MF scheme?

An open ended scheme investing in equity and equity related instruments, debt & debt derivatives and money market instruments, Gold ETFs, Silver ETFs, exchange traded commodity derivatives (ETCD) and in units of REITs and InvITs.

There is no assurance or guarantee that the investment objective of the scheme will be realized.

What is the allocation pattern in this mutual fund?

This fund investment pattern is as follows:

Type of instruments Min % Max % Risk Profile
Equity & Equity Related Instruments 35% 85% Very High
Debt securities (including securitized debt
& debt derivatives) and Money Market
Instruments* including Units of Debt
oriented mutual fund schemes
10% 55% Low to Moderate
Gold ETFs, Silver ETFs, Exchange Traded
Commodity Derivatives (ETCDs) & any
other mode of investment in commodities
as permitted by SEBI from time to time
10% 55% Moderately High
Units of REITs and InvITs 0% 10% High

How such asset class has performed individually?

Here is how the performance of equity, debt gold in the last 10 years against model portfolio for understanding how such asset class performed.

Bajaj Finserv Multi Asset Allocation Fund - Performance of various asset classes

Why to invest in Bajaj Finserv Multi Asset Allocation Fund NFO?

Investing in funds like the Bajaj Finserv Multi Asset Allocation Fund can offer several advantages for investors:

  • Diversification: This fund invests across various asset classes like equity, debt, commodities (gold and silver), and REITs/InvITs. Diversification helps spread risk across different investment avenues, potentially reducing the impact of volatility in any single asset class.
  • Adaptability: The fund’s ability to invest in multiple asset classes allows it to adapt to changing market conditions. Different asset classes perform differently in various economic scenarios, and this fund aims to capitalize on those variations.
  • Historical Performance: The fund’s underlying asset class historical performance data provided shows that different asset classes perform well in different years. By investing across multiple asset classes, the fund aims to capture the growth potential of each asset class while mitigating risks associated with individual asset classes’ underperformance.
  • Risk Management: The fund’s asset allocation strategy and diversification can help manage risk. For example, while equity investments offer growth potential, debt investments provide stability. Similarly, investments in gold and silver can act as a hedge against market volatility.
  • Income Generation: For investors seeking income generation, the fund invests in fixed-income instruments and comes with dividend-paying strategy. Dividend-paying companies can provide a steady stream of income, which can be appealing for investors looking for regular cash flows.

Risk Factors in Bajaj Finserv Multi Asset Allocation Fund NFO

Investing in the Bajaj Finserv Multi Asset Allocation Fund involves certain risks that investors should consider:

  • Market Risk: Fluctuations in the financial markets can affect the value of investments across asset classes, including equity, debt, commodities, and REITs/InvITs.
  • Asset Class Risk: Each asset class, such as equity, debt, and commodities, carries its own set of risks. For example, equity investments are subject to market volatility, while debt investments may be affected by changes in interest rates.
  • Interest Rate Risk: Changes in interest rates can impact the value of debt investments held by the fund. Bond prices typically move inversely to interest rates.
  • Credit Risk: Debt investments are exposed to credit risk, which is the risk of default by issuers of bonds or other fixed-income securities held by the fund.
  • Liquidity Risk: Certain investments, particularly in REITs/InvITs and commodities, may have limited liquidity, making it challenging to buy or sell them at desired prices.
  • Commodity Price Risk: Investments in commodities like gold and silver are subject to price fluctuations influenced by factors such as supply and demand dynamics, geopolitical events, and economic indicators.
  • You can refer complete risk factors of investing in this particular scheme in SID / KIM / NFO prospectus.

Bajaj Finserv Multi Asset Allocation Fund NFO – Should you invest?

Bajaj Finserv Multi Asset Allocation Fund invests in multi asset class, i.e. equity, debt, gold, Silver. REITs and InvITs. This combination has underperformed in the short term, however generated moderate to high returns in the medium to long term. Such funds are good for portfolio diversification.

On other hand, such funds offer limited control to play with various asset classes. Such funds underperform in the short to medium term, hence don’t invest if you are are not long term investor.

High risk investors who understand the pros and cons and invest in such multi asset mutual funds.

Suresh KP

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