India’s First Small-Cap Fund in ULIP Segment Launched By Bajaj Allianz Life; Check Details

Bajaj Allianz Life, a leading private life insurer in India, has launched the country’s first small-cap fund in the ULIP segment that offers customers the opportunity to achieve capital appreciation by investing in a diversified portfolio of small-cap stocks. The benchmark index is the Nifty Small Cap 100 index. The NFO (new fund offer) period for Bajaj Allianz Life’s small-cap fund ends on May 23, 2023.

“The equity investment strategy of the Bajaj Allianz Life Investment team revolves around identifying companies with a competitive advantage, good corporate governance, high ROE/ROCE, robust free cash flow, growth visibility and attractive valuations. The underlying philosophy is to uncover businesses with large market opportunities and prioritize Growth at a Reasonable Price from a valuation perspective,” according to a statement.

It added that the Bajaj Allianz Life Small Cap Fund will invest a minimum of 60 per cent in small-cap stocks, and market-cap exposure is based on equity exposure re-scaled to 100 per cent.

Sampath Reddy, chief investment officer of Bajaj Allianz Life Insurance, said, “We are thrilled to launch the first-of-its-kind small-cap fund in the life insurance industry, with the focus on long-term wealth creation for our customers. This fund will strongly resonate with investors and support them in the journey towards achieving their life goals.”

Small-Cap Fund Growth

The small-cap fund category has seen significant traction from investors in the other financial saving avenues, over the past few years;

Small-cap equity funds have managed to outperform the benchmark Nifty Small Cap 100 index by a significant margin over the long term;

Nifty Small-cap 100 index valuation has moderated from its highs and is now below the long-term average, making a case for investment in small-caps from a valuation perspective.