Adjustment Necessary: Strategies for Bajaj Finserv Equity Savings Fund to Navigate Diverse Market Phases
Bajaj Finserv Equity Savings Fund: A Balanced Investment Option for Diverse Market Conditions
The Bajaj Finserv Equity Savings Fund, a hybrid investment offering, is set to reopen for subscription within five business days of the allotment date, with an offer price of Rs. 10 per unit during the New Fund Offer period. This fund, which navigates different market conditions by maintaining a balanced, actively managed portfolio, aims to provide growth potential, stability, and tax efficiency while controlling risk and volatility across sideways, bull, and bear markets.
In sideways markets, the fund's arbitrage component generates low-risk returns by exploiting price differences in markets, while the debt portion adds stability and income, cushioning equity volatility and limiting drawdowns. In bull markets, the fund benefits from its equity allocation, which invests in stocks selected using a Growth at Reasonable Price (GARP) approach to capture long-term capital appreciation without excessive risk exposure. Conversely, in bear markets, the fixed income (debt) instruments and arbitrage strategy provide a defensive cushion, reducing the overall portfolio volatility and helping preserve capital.
This hybrid structure, combined with an active management strategy that flexibly adjusts equity exposure between 10% and 40%, allows the fund to adapt to changing market conditions. The fund maintains above 65% allocation to equities (including arbitrage) to qualify as an equity-oriented fund for tax purposes. It may increase allocation to arbitrage and debt when the market lacks clear direction.
The Bajaj Finserv Equity Savings Fund offers additional features such as no lock-in period, suitability for conservative investors seeking steady growth with controlled risk, and the ability to serve as a "park and grow" option during uncertain equity market phases. It also aims to offer an additional layer of diversification through strategic allocation to REITs and InvITs.
Investors can invest in the Bajaj Finserv Equity Savings Fund either directly with Bajaj Finserv AMC or through a registered mutual fund distributor. Investments can be made online or offline through various modes, including the Bajaj Finserv AMC website, KFintech, demat account, aggregator platforms, and MF Utility.
It is important to note that mutual fund investments are subject to market risks, and investors should read all scheme-related documents carefully. The New Fund Offer period for the Bajaj Finserv Equity Savings Fund began on July 28, 2025, and ends on August 11, 2025. The minimum investment for lumpsum is Rs. 500, and the minimum investment for Systematic Investment Plan (SIP) is 6 instalments. Short-term capital gains are taxed at 20%, while long-term capital gains tax is 12.5% after a tax-exempt limit of Rs. 1.25 lakh.
In a bear market, the fund's moderate net equity exposure can result in lesser drawdowns. The debt portion of the fund can act as a cushion against volatility, and the arbitrage component has the potential to capitalize on brief price differences. In a bull market, the equity component, selected using a GARP approach, can potentially capture upside opportunities.
The Bajaj Finserv Equity Savings Fund may be suitable for investors looking for lower volatility options with liquidity, those wanting reduced risk with some exposure to upside, those seeking an option to park funds to deploy later, and people exploring alternatives to traditional savings plans or fixed deposits. The fund aims for inflation-beating, tax-efficient returns with lower volatility than pure equity funds, making it an attractive choice for those seeking a balanced investment option.
[1] Bajaj Finserv Equity Savings Fund: A Comprehensive Guide [2] Understanding Hybrid Funds: A Beginner's Guide [3] GARP Investing: A Strategy for Long-term Capital Appreciation [4] The Role of Arbitrage in Mutual Funds: An Explanation
- Investing in the Bajaj Finserv Equity Savings Fund, a balanced investment option, allows individuals to capitalize on growth potential, stability, and tax efficiency while controlling risk and volatility across diverse market conditions.
- This fund, also known as a hybrid fund, combines an active management strategy and a moderately net equity exposure that ranges from 10% to 40%, enabling it to adapt to different market conditions, providing a defensive cushion in bear markets and capitalizing on upside opportunities in bull markets.
- In addition to traditional equity investments, this fund may allocate a portion to REITs and InvITs, offering an extra layer of diversification for personal-finance portfolios, especially for conservative investors seeking steady growth with controlled risk.
