NFO Update: Bajaj Finserv Mutual Fund launches small cap fund
has launched
Bajaj Finserv Small Cap Fund
, an open-ended equity scheme predominantly investing in small cap stocks, that offers quality, growth and value.
The fund is open for subscription and will close on July 11.
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Bajaj Finserv Small Cap Fund is designed for investors aiming to build long-term wealth by investing primarily in equity and equity-related instruments of small cap companies, according to a release by the fund house.
The recent correction in small caps presents a compelling entry point for long-term investors. Even though over 80% of small-cap companies have posted strong profit growth of 38% and solid return ratios, most of them are still trading 15–45% below their 52-week highs.
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This recent market correction has opened up a clear gap between the true value of these companies and their current market prices, said the release.
Coupled with structural tailwinds such as the 'Make in India' push, rising formalisation, and digital transformation across sectors, small caps are well-positioned to benefit disproportionately in the next growth cycle, making this an attractive investment opportunity.
The equity portion of the fund will be managed by
Nimesh Chandan
, CIO and Sorbh Gupta, Head - Equity, and the debt portion by
Siddharth Chaudhary
, Head – Fixed Income.
The minimum application amount is Rs 500 (Plus multiples of Re 1), with a minimum additional application of Rs 100 (Plus multiples of Re 1). An exit load of 1% is applicable if the investment is redeemed within six months of the date of the allotment. The fund offers both growth and IDCW (Income Distribution cum Capital Withdrawal) options.
'The launch of the Small Cap Fund reflects our deep conviction in the long-term potential of India's dynamic small-cap universe. Small caps typically exhibit higher volatility than broader indices, underscoring the importance of active management in navigating market fluctuations and identifying quality opportunities,' said
Ganesh Mohan
, Managing Director, Bajaj Finserv AMC.
'The strategy is built around discovering high-quality companies in the early phases of growth that are positioned to outperform over time. With the recent small cap correction, the NFO is poised to take advantage of this golden opportunity, enabling investors to participate in long term wealth creation as these businesses scale and contribute meaningfully to the economy,' he added.
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Bajaj Finserv Small Cap Fund is well-suited for those looking to benefit from the growth potential of fundamentally strong businesses that are currently trading below their intrinsic value. It also appeals to investors who want to diversify their portfolios by adding small-cap stocks with growth prospects. The fund is benchmarked to the BSE 250 SmallCap Index TRI.
'Our new small cap fund will be a portfolio of quality businesses with scalability that trade below their intrinsic value. Many industries and subsectors are available exclusively in the small cap category. In essence, there are opportunities to pick up leaders in emerging businesses and challengers in others from this small cap space,' said Nimesh Chandan, Chief Investment Officer, Bajaj Finserv AMC.
'The NSE small cap 250 Index is almost flat year on year. However, many companies generated strong profit growth last year. This allows us to invest in those small cap companies at valuations lower than last year after this time correction,' Nimesh Chandan added
It goes beyond selecting quality stocks by rigorously filtering out companies with weak governance, inconsistent fundamentals, or financial red flags. This disciplined approach narrows the universe of over 1,100 small-cap stocks to a focused set of high-potential businesses.
A key part of the process is our internal forensic and risk-aware analysis, which filters out companies with weak governance or financial red flags. From a universe of around 300-400 small-cap stocks, this disciplined approach narrows the selection to a portfolio of 40– 100 carefully chosen businesses
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