Bajaj Finserv Multi Cap Fund NFO: A contrarian approach to diversified equity investing

The
world
of
equity
investing
is
full
of
opportunities
and
risks.
For
investors
looking
to
diversify
their
portfolios
and
pursue
growth
across
various
market
segments,
the
Bajaj
Finserv
Multi
Cap
Fund
can
be
a
suitable
option.
The
New
Fund
Offer
(NFO)
period
of
this
fund
is
from
Thursday,
6th
February,
2025
to
Thursday,
20th
February,
2025.
This
new
equity
fund
by
Bajaj
Finserv
AMC
adapts
the
contrarian
investment
strategy.

Invest
in
Bajaj
Finserv
Multi
Cap
Fund
with
Contrarian
Investing

In
this
article,
we
will
explore
what
contrarian
investing
is,
what
multi
cap
funds
are,
and
how
the

Bajaj
Finserv
Multi
Cap
Fund
leverages
contrarian
investing
to
help
investors
create
a
diversified
portfolio
with
the
potential
for
superior
long-term
returns.

What
is
contrarian
investing?

Contrarian
investing
is
an
investment
strategy
where
investors
go
against
the
prevailing
market
sentiment.
While
most
investors
tend
to
follow
the
crowd,
buying
when
the
market
is
bullish
and
selling
during
downturns,
contrarian
investors
make
decisions
that
are
opposite
to
popular
opinion.
In
other
words,
contrarian
investors
often
buy
when
others
are
selling
and
sell
when
others
are
buying.

This
strategy
relies
on
the
belief
that
markets
tend
to
overreact
to
news
–
whether
it’s
positive
or
negative
–
and
create
buying
opportunities
when
stocks
are
undervalued
(during
market
corrections)
or
selling
opportunities
when
stocks
are
overvalued
(during
market
booms).
A
successful
contrarian
investor
aims
to
profit
by
capitalizing
on
the
market’s
overreaction
and
the
eventual
return
of
rational
pricing.

Key
elements
of
contrarian
investing
include:

• 
  
  
  Patience:
  Contrarian
  investors
  must
  have
  the
  patience
  to
  hold
  onto
  investments
  until
  market
  sentiment
  shifts
  in
  their
  favour.

• 
  
  
  Research:
  A
  detailed
  understanding
  of
  undervalued
  or
  overvalued
  stocks
  and
  market
  trends.

• 
  
  
  Risk
  tolerance:
  Since
  contrarian
  investing
  often
  involves
  investing
  in
  companies
  or
  sectors
  that
  are
  out
  of
  favour,
  it
  carries
  higher
  risk,
  but
  also
  higher
  potential
  long
  term
  returns.

What
are
multi
cap
funds?

Multi
cap
funds
are
equity
mutual
funds
that
invest
across
different
market
capitalization
categories:
large
cap,
mid
cap,
and
small
cap
stocks
with
minimum
25%
across
each
of
large
cap,
mid
cap
and
small
cap.
These
funds
are
designed
to
provide
diversification
across
sectors
and
market
segments,
ensuring
that
the
investor
has
exposure
to
a
broad
spectrum
of
companies.

1. 
   
   
   Large
   cap
   stocks:
   These
   are
   shares
   of
   established
   companies
   with
   large
   market
   capitalization.
   They
   are
   relatively
   stable,
   and
   offer
   consistent,
   though
   lower,
   returns.

2. 
   
   
   Mid
   cap
   stocks:
   These
   stocks
   belong
   to
   companies
   that
   are
   in
   the
   growth
   phase.
   They
   offer
   relatively
   better
   growth
   potential
   than
   large
   cap
   stocks
   but
   tend
   to
   be
   more
   volatile.

3. 
   
   
   Small
   cap
   stocks:
   These
   are
   stocks
   of
   smaller
   companies,
   typically
   with
   high
   long
   term
   growth
   potential.
   They
   come
   with
   higher
   risk,
   as
   smaller
   companies
   are
   more
   vulnerable
   to
   market
   fluctuations.

By
investing
across
all
three
segments,
multi
cap
funds
aim
to
provide
both
–
growth
potential
and
stability.
They
balance
the
risks
of
small
cap
investments
with
the
relative
stability
and
maturity
of
large
cap
stocks.

How
does
the
Bajaj
Finserv
Multi
Cap
Fund
Leverage
contrarian
investing?

The
Bajaj
Finserv
Multi
Cap
Fund
uses
a
contrarian
investment
strategy.
The
fund
looks
for
opportunities
in
undervalued
stocks
across
large,
mid,
and
small
cap
segments.
Let’s
break
down
how
this
strategy
works
within
the
context
of
a
multi
cap
fund:

1.
Undervalued
large
cap
stocks

In
the
world
of
large
cap
stocks,
it’s
easy
for
investors
to
follow
the
herd
and
invest
in
popular,
well-known
companies.
However,
the
Bajaj
Finserv
Multi
Cap
Fund
takes
a
different
approach
by
seeking
out
large
cap
stocks
that
are
undervalued
but
still
show
strong
fundamentals.
These
stocks
may
have
been
overlooked
by
the
market
due
to
temporary
setbacks
or
market
corrections.
Fund
managers
believe
that
these
stocks
will
eventually
recover,
providing
potential
long-term
returns
when
market
sentiment
turns
favourable.

2.
Contrarian
mid
cap
picks

Mid
cap
stocks
present
an
interesting
opportunity
for
contrarian
investors.
These
companies
are
in
the
growth
phase,
and
often,
they
face
short-term
volatility
due
to
factors
like
market
sentiment
or
changing
consumer
behaviour.
The
Bajaj
Finserv
Multi
Cap
Fund
identifies
mid
cap
stocks
that
have
been
unfairly
punished
by
market
overreaction.
By
investing
in
these
stocks,
the
fund
aims
to
capitalize
on
their
growth
potential
once
the
market
corrects
its
view
on
these
companies.

3.
Small
Cap
Opportunities

Small
cap
stocks
can
be
highly
volatile,
but
they
often
offer
the
better
long
term
growth
potential.
The
Bajaj
Finserv
Multi
Cap
Fund
uses
contrarian
investing
to
target
undervalued
small
cap
stocks
that
the
market
may
be
ignoring
or
dismissing.
While
small
cap
stocks
can
be
risky,
the
fund
believes
that
identifying
suitable
opportunities
at
suitable
time
can
lead
to
reasonable
returns
when
the
broader
market
shifts
its
attention
to
these
stocks.

4.
Sector
Rotation

The
fund
also
employs
a
contrarian
approach
to
sector
rotation.
For
instance,
if
a
particular
sector
is
facing
a
downturn
(due
to
unfavourable
news
or
global
trends),
many
investors
may
panic
and
sell
off
their
holdings.
The
Bajaj
Finserv
Multi
Cap
Fund,
however,
could
see
this
as
an
opportunity
to
buy
into
sectors
that
are
undervalued
or
mispriced,
hoping
on
a
future
recovery.

In
doing
so,
the
fund
diversifies
its
portfolio,
balancing
investments
across
different
sectors
and
market
caps,
and
is
positioned
to
take
advantage
of
the
market’s
overreactions.
Investors
can
consider
starting
an
SIP
or
lumpsum
in
this
scheme.
They
can
make
use
of
tools
such
as
an
SIP
calculator
or

mutual
fund
lumpsum
calculator
to
estimate
the
future
value
of
their
investments.

Conclusion

The
Bajaj
Finserv
Multi
Cap
Fund,
with
its
contrarian
investment
strategy,
offers
a
unique
opportunity
for
investors
seeking
a
diversified
portfolio
with
the
potential
for
superior
returns
in
long
term.
For
investors
willing
to
go
against
the
crowd
and
bet
on
undervalued
stocks,
the
Bajaj
Finserv
Multi
Cap
Fund
seeks
to
provide
a
diversified,
strategically
balanced
approach
that
can
help
unlock
value
across
the
market.

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