How Bajaj Finserv Flexi Cap Fund Adapted to a Volatile Market to Deliver Robust Returns 

In a year that saw the Indian financial market witnesses record highs as well as lows, the Bajaj Finserv Flexi Cap Fund recorded robust growth thanks to its future-focused MEGATRENDS strategy. 

The first equity scheme to be launched by Bajaj Finserv Asset Management Ltd, the Bajaj Finserv Flexi Cap Fund delivered returns of 41.30%* under the regular plan and 43.43%* under the direct plan.

Moreover, it maintained an average beta of less than one, indicating that the fund’s performance was less volatile than that of the broader market.

This article tells you more about the Bajaj Finserv Flexi Cap Fund, its MEGATRENDS invested strategy and how it adapted to a changing market. 

What are megatrends?

Megatrends are powerful, transformative forces that shape the future of our world across various domains, including technology, society, economy, and the environment. These trends have long-term implications, influencing the way we live, work, and interact with each other. Examples of megatrends include technological innovation, regulatory changes, the growing focus on sustainable development and demographic shifts. 

The Bajaj Finserv Flexi Cap Fund seeks to invest in existing megatrends and also identify potential future winners. Through this, it seeks to a relatively consistent performance by focusing on long-term growth potential rather than short-term movements. Moreover, by seeking to identify megatrends early, the fund aims to provide significant wealth-building potential in the long-term by capitalising on emerging opportunities before they are adopted on a large scale. 

Navigating a volatile market 

The forward-looking strategy of the Bajaj Finserv Flexi Cap Fund helped the fund ignore short-term noise caused by brief inefficiencies and reactions in the market and focus instead on long-term trends. 

However, true to its label, the Flexi Cap Fund dynamically adjusted its allocation across market caps and strategically selected investment opportunities in response to market conditions. It adopted a staggered deployment strategy to distribute investments over time. This helped mitigate the effects of market volatility and optimising entry points. 

In the past year, the portfolio focused on the financial sector, manufacturing and capital goods, the consumer discretionary sector and technology. In line with the megatrends approach, the fund managers identified and invested in emerging opportunities and enduring shifts within these sectors, to create a relatively resilient portfolio with the potential to generate alpha in the long term. 

Sectors in the spotlight

As part of its megatrends approach, the Bajaj Finserv Flexi Cap Fund focuses on identifying opportunities in the following sectors

1. Technology: One of the most prominent megatrends across the world the rapid advancement of technology. Innovations such as artificial intelligence, blockchain, automation and the Internet of Things (IoT) are revolutionising industries, changing workforces and redefining jobs. 
2. Regulatory trends: These are significant and long-term shifts in regulations and policies that can impact industries and economies. In the Indian context, these include the push for increased adoption of renewable energy and the growing emphasis on developing domestic manufacturing capabilities. 
3. Economic changes: The rise of emerging markets, India’s rapid growth, the quest for new global investment opportunities and rising deglobalisation pose opportunities for India and can potentially create winning investment opportunities in the future. 
4. Nature conservation: With climate change posing significant risks to economies and communities, there is a growing emphasis on renewable energy, sustainable practices, and corporate responsibility. 
5. Demographic shifts: Increased life expectancy and aging populations are leading to increased demand for healthcare services and a growing focus on wellness. The growing middle class in India is also creating new consumers and a growing demand for goods and services, including discretionary goods. 
6. Social change: Economic growth is driving urbanisation and increasing demand for education, with the edtech market witnessing steady growth. Rising per-capita income is also increasing demand in the real estate and luxury sectors. Other societal changes such as changing family patterns, digital connectivity and rising awareness about diversity and inclusion are also likely to influence businesses, consumption patterns and consumer behaviour. 

Advantages of megatrend investing

An investment approach that focuses on megatrends can offer several advantages, especially for those looking for long-term growth potential. Some of these benefits are:

1. Long-term growth potential: Sustained and enduring trends that can potentially offer growth opportunities over several years or even decades. 
2. Diversification: Investing across megatrends can help diversify your portfolio, reducing risk. Different megatrends may have varying levels of correlation, meaning that a downturn in one area may be offset by a rise in another. 
3. Thematic Investing: Megatrend investing allows you to focus on specific themes that align with your values or beliefs. This can be particularly appealing to socially conscious investors.   
4. Innovation: Megatrends often drive innovation and disruption. Investing in companies that are at the forefront of these changes can lead to significant wealth building potential in the long run, especially if for early movers.   
5. Resilience: Megatrend investments can potentially be more resilient to temporary churns in the market and better positioned to navigate future challenges. 

How to invest in Bajaj Finserv Flexi Cap Fund

You can invest in the Bajaj Finserv Flexi Cap Fund either offline or online. You can invest directly through Bajaj Finserv Asset Management Ltd. or through registered mutual fund distributors and aggregator platforms.

To invest online, visit Bajaj AMC’s official website and select the login/register option on the homepage. Alternatively, you can click ‘Invest Now’ on the Flexi Cap Fund page. You will be directed to the investor portal and guided through a quick, 100% digital application process.

You can opt for either a lump sum or Systematic Investment Plan or SIP to invest, investments start at Rs. 500.

*Source: Internal Data As on 30th August 2024 (Since Inception Annualized Return). Past performance may or may not be sustained in the future. 

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.