BAJAJ INVESTMENT TRUST I

Bajaj Finserv Asset Management Limited (Bajaj AMC) bases its investment philosophy on a proprietary framework called InQuBe. This approach is designed to blend traditional fundamental analysis with modern data science and psychology to uncover market opportunities.

The InQuBe Philosophy

The name InQuBe represents the synergy of three distinct “edges” the firm seeks to gain over the market:

• Informational Edge (In):

  • Focuses on deep fundamental research to identify business strengths that the broader market might have overlooked.

  • Believes that long-term wealth is created by focusing on quality and management.

• Quantitative Edge (Qu):

  • Utilizes data-driven models and analytics to identify patterns and remove human emotional bias from the initial screening process.

  • Involves rigorous stress testing and risk-adjusted return evaluations.

• Behavioural Edge (Be):

  • This is a core differentiator for Bajaj AMC. It acknowledges that markets are often irrational due to human emotions (fear and greed).

  • The firm seeks to exploit situations where securities are mispriced due to behavioral factors, such as overreaction to short-term news.

Asset-Specific Strategies

• Equity: The firm prioritizes long-term growth and “Megatrend Investing”—identifying large-scale, structural shifts in the economy rather than chasing short-term market cycles. They aim to buy companies at prices below their “true worth” (intrinsic value).

• Fixed Income: The philosophy centers on Quality and Liquidity. They create an investment universe of borrowers with strong repayment capacity and conduct regular stress tests to ensure the portfolio can withstand market volatility.

Key Investment Principles

• Alpha Generation: A commitment to delivering returns above benchmarks without taking disproportionate risks.

• Risk-Adjusted Returns: Every investment is viewed through the lens of the risk taken to achieve the return, rather than just chasing the highest absolute number.

• Megatrend Focus: Investing in structural trends (like digitalization or shifting consumer habits) for sustainable growth.