Bajaj Life Insurance Launches New Pension Index Fund NFO Till November 16

Bajaj Life Insurance has announced the launch of its New Fund Offer (NFO), the Bajaj Life BSE 500 Enhanced Value 50 Pension Index Fund. This fund will be open for subscriptions from investors until November 16 and is exclusively available as part of the Bajaj Life Smart Pension Plan, a Unit Linked Insurance Plan (ULIP).

The primary objective of this newly launched fund is to assist investors in accumulating a retirement corpus that grows in line with market performance. It employs a value-based investment strategy and aims to mirror the returns of the BSE 500 Enhanced Value 50 Index. This index comprises 50 companies selected from the larger BSE 500 universe based on enhanced value parameters such as Book-to-Price, Earnings-to-Price, and Sales-to-Price ratios, identifying stocks that are fundamentally sound yet undervalued.

The fund plans to invest across large-cap, mid-cap, and small-cap stocks, offering balanced diversification. The portfolio will undergo quarterly rebalancing to adapt to market changes and maintain alignment with the benchmark index.

According to Srinivas Rao Ravuri, Chief Investment Officer at Bajaj Life Insurance, the fund's purpose is to integrate a disciplined value investing framework into retirement planning, providing investors a structured way to participate in India's long-term economic growth via equity markets.

Market observers note that this launch signifies a broader trend within the insurance sector, where companies are expanding their ULIP offerings to provide investors with more transparent, rule-based investment alternatives. These products are also responding to a growing demand for passive and value-oriented investment strategies, particularly among individuals focused on retirement planning.

The BSE 500 Enhanced Value 50 Index, introduced by BSE in 2021, is designed to track the performance of value stocks across different market capitalizations and is increasingly being adopted as a benchmark for fund managers implementing systematic, factor-based investment strategies.

Impact: This news has a moderate impact on the Indian stock market, particularly within the insurance and asset management sectors. For investors, it introduces a new, structured option for retirement planning that focuses on value and passive investment strategies. It may lead to increased Assets Under Management (AUM) for Bajaj Life Insurance and reflects the competitive landscape of ULIP products offering index-linked strategies. The focus on undervalued companies could potentially lead to wealth creation for long-term investors if the strategy performs as expected. Rating: 5/10

Difficult Terms: - New Fund Offer (NFO): The initial period when a mutual fund scheme is open for subscription by investors. - ULIP (Unit Linked Insurance Plan): An insurance product that offers both insurance coverage and investment opportunities. - Corpus: The total amount of money available for a specific purpose, in this case, retirement. - Index: A statistical measure that represents the performance of a specific segment of the market, like the BSE 500. - Value Investing: An investment strategy that involves picking securities that appear underpriced based on fundamental analysis. - Benchmark Index: A standard against which the performance of a fund or investment is measured. - Large-cap, Mid-cap, Small-cap: Classifications of companies based on their market capitalization (total value of outstanding shares). - Rebalancing: The process of buying or selling assets in a portfolio to maintain the desired asset allocation. - Systematic Investment: An investment approach involving regular, fixed investments at predetermined intervals. - Factor-based Strategies: Investment approaches that select securities based on specific characteristics or 'factors' like value, growth, or momentum.