Bajaj Finserv Asset Management has announced the launch of Bajaj Finserv Balanced Advantage Fund (BAF) – an Open-Ended Dynamic Asset Allocation Fund suitable for investors wanting to invest in equity and equity related Instruments including derivatives, and fixed income instruments.
Bajaj Finserv BAF uses a unique investment model which combines an approach of Behavioural sciences and Financial Insights. By using this asset allocation technique, investors may seek benefit to navigate market volatility and optimize returns. Rather than using only quantitative models to decide allocation, the Bajaj Finserv AMC investment team analyses behavioural aspect as well, which may help investors earn better returns over long term.
Traditionally, the approach is to follow the fundamentals, past performance and quantitative models to decide the asset allocation strategy. However, Bajaj Finserv AMC’s investment team believes in using behavioural science models as well, to decide on asset allocation and timing of investments.
The Bajaj Finserv AMC BAF model estimates the fair market value based on future earnings per share, growth expectations, and interest rates, guiding the core investment strategy. The fund’s behavioural indicator helps navigate market volatility and optimize returns by fine-tuning entry and exit points. It also guides equity allocation, increasing it when the market is undervalued and reducing it when it’s overvalued.
Speaking on the launch of the product, Mr. Ganesh Mohan, CEO, Bajaj Finserv Asset Management, said,“Given that we are a new entrant, we have the opportunity of looking at things afresh. Our BAF is yet another example of that approach. Here, both Behavioural Sciences and Financial insights are ‘balanced’, to help us make our investment decisions. Our unique investment philosophy (INQUBE) seeks to combine the Informative, Quantitative and Behavioural edge to generate alpha. While this forms the plank for almost all our products, it is in our Balanced Advantage Fund that one will really be able to see a more pronounced impact of our behavioural tools. I’m certain you will see many more behavioural sciences-based ideas and products being talked about in the industry in the near future.”
Mr. Nimesh Chandan, CIO, Bajaj Finserv Asset Management said, “The crowd is not always wrong. As a result, selling whenever equity market rises and purchasing every time the market falls may not be the best asset allocation approach. It is critical to recognize where the crowd has overreacted in greed or fear and capitalize on that response. We have designed an asset allocation strategy based on the study of fundamental as well as the behavioural cycle of the market. Fundamental analysis tools provide us with an assessment of the market’s fair value, while behavioural analysis techniques provide us with the change in market bias between bullish and bearish. When these indications are combined, they show whether the market has overreacted or underreacted in either way.”
The fund will be jointly managed by Mr. Nimesh Chandan and Mr. Sorbh Gupta on the Equity side and Mr. Siddharth Chaudhary on the Debt side.
The new fund offer will open for initial subscription on 24th November, and close on 8th December 2023.
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