What makes Bajaj Finserv Banking and Financial Services Fund a Suitable fit for your portfolio

The Bajaj Finserv Banking and Financial Services Fund takes this approach by offering exposure across India’s expanding financial ecosystem, including banks, NBFCs, insurers, asset managers, and fintech companies.

The Bajaj Finserv Banking and Financial Services Fund NFO period opens on Monday, November 10, 2025, and closes on Monday, November 24, 2025. The scheme will reopen for subscription within five business days from the date of allotment.

Let’s discuss what may make this fund a suitable fit for you.

A long-term investment outlook
If you’re an investor with a long-term horizon, the Bajaj Finserv Banking and Financial Services Fund may offer a suitable opportunity to participate in India’s growth story. The country is projected to become the world’s third-largest economy by 2030, with an estimated GDP of around USD 7.3 trillion, supported by trends such as digitalisation, infrastructure development, and a young, aspirational workforce.
As this growth unfolds, India’s financial system will be central to sustaining it. Estimates suggest that financial assets may need to expand nearly 20 times their current size, with banks potentially adding about USD 4 trillion in capital over the next two decades. Such expansion may create a multiplier effect across the economy, opening avenues for investors seeking long-term participation in the financial services sector.

Sources: The Economic Times, Reuters, The Times of India (July–August 2025), Press Information Bureau, International Monetary Fund, World Bank, Boston Consulting Group analysis.

Exposure to India’s BFSI opportunity
If you wish to participate in the growth potential of India’s Banking, Financial Services and Insurance (BFSI) sector, a potential enabler of the country’s economic expansion, the Bajaj Finserv Banking and Financial Services Fund may be considered. The sector plays a pivotal role in driving capital mobilisation, improving credit access, and strengthening digital and financial inclusion.

Over the past few years, credit disbursement to priority sectors has risen by about 85% since 2019, UPI transaction values have grown nearly fivefold in four years, and microfinance portfolios now reach close to 79 million borrowers. India’s credit-to-deposit ratio remains healthy at around 79%, reflecting robust financial intermediation.

Together, these developments highlight how the BFSI sector continues to support India’s growth by efficiently converting household savings into productive economic activity, a trend that long-term investors may consider as part of their portfolio strategy.

Sources: MOFSL, Press Information Bureau, CareEdge

Focused and research-driven approach
If you understand sectoral investing and are comfortable with short-term fluctuations while aiming for potential long-term growth, the Bajaj Finserv Banking and Financial Services Fund may be suitable for you. The fund focuses exclusively on financial services and follows a research-driven investment process.

It begins with a total stock universe of around 1,100 companies, which is first filtered using a megatrends lens to identify about 180–200 BFSI companies. From there, the fund applies its proprietary InQuBe framework to select 45–60 stocks for the final portfolio.

This disciplined approach helps identify opportunities across various segments of BFSI while managing concentration risk through diversification.

*The portfolio count is indicative, and actual number will depend on market conditions at the time of making investment.

Source: Internal Fund Framework (InQuBe process)

Diversified within financial services
If you are looking for diversification within the financial services sector, the Bajaj Finserv Banking and Financial Services Fund offers this opportunity. Over the years, India’s BFSI sector has evolved into one of the key pillars of the economy, witnessing a more than 50-fold rise in market capitalisation, from Rs. 1.8 trillion in 2005 to Rs. 91 trillion in 2025, reflecting a CAGR of about 22%. Its contribution to GDP has also increased from 6% to 27%, supported by regulatory reforms, greater formalisation, and wider financial participation.

This growth has been broad-based across key segments. Banks have strengthened their fundamentals, with GNPA levels declining from 5.8% to 2.2% and credit costs falling from 1.3% to 0.4%. NBFCs have recorded steady growth, with net worth expanding at around 15% CAGR and profit after tax at 32% CAGR, now contributing nearly 18% of BFSI earnings. The insurance sector’s AUM has grown tenfold since FY07 to Rs. 61.6 trillion, while mutual fund AUM has increased 45 times in two decades, with the AUM-to-GDP ratio rising from 7% to 19.9%.

By investing across these diverse sub-sectors, the fund may help investors participate in the broader growth potential of India’s financial services ecosystem.

Sources: Reserve Bank of India, MOFSL, Insurance Regulatory and Development Authority of India, Association of Mutual Funds in India, Swiss Re Sigma, Press Information Bureau.

Aligned with structural growth trends
If you want to invest in the megatrends shaping India’s financial future, the Bajaj Finserv Banking and Financial Services Fund offers exposure to sectors aligned with these long-term shifts.

• Technology: Non-cash transactions are expected to rise from 38% in FY23 to 62% in FY28, with Tier 2 and smaller cities likely to drive over 80% of digital lending disbursements.

• Economic inclusion: Jan Dhan accounts have expanded nearly 18 times in the past decade to 540 million, with deposits of around Rs. 2.3 trillion, strengthening the foundation for financial inclusion.

• Demographic growth: As nearly 75% of Indian households move into middle- and high-income segments by 2030, the demand for credit, insurance, and investments may continue to grow.

• Social transformation: Fintech innovation is widening credit access, especially for new-to-credit individuals and women entrepreneurs.

Through its diversified exposure, the fund may help investors participate in these structural trends that are reshaping India’s financial ecosystem.

Sources: Mobikwik RHP, Redseer, Reserve Bank of India, Periodic Labor Force Survey 2023, Global System for Mobile Communications Association 2023, Jefferies, Internal.

Suitable entry point in the BFSI sector
If you are evaluating when to add sectoral exposure to your portfolio, the current environment in the BFSI space may be suitable. Valuations within the sector are presently below their 14-year averages, while fundamentals remain stable. Over the past two decades, the sector’s weight in the Nifty 50 has increased 2.6 times, now standing at around 37.9%.

Banks today account for about 57% of the BFSI market capitalisation, compared to nearly 85% in 2005 — reflecting rising opportunities in NBFCs, insurers, and asset managers. With improving asset quality, steady profitability, and expected credit growth following the RBI’s 100 bps repo rate cut, this phase may offer investors a suitable entry point into the BFSI sector.

Sources: Report (April 2025), Reserve Bank of India, Jefferies, National Stock Exchange

Conclusion
The Bajaj Finserv Banking and Financial Services Fund may suit investors with a long-term outlook who want to participate in India’s financial growth story. With diversified exposure across banks, NBFCs, insurers, and fintechs, the fund offers a structured way to invest in sectors driving the economy forward. 

With its research-driven investment framework and diversified portfolio of 45–60 companies, the fund aims to capture opportunities emerging from structural shifts such as digitalisation, financial inclusion, and rising income levels.

It is advisable to talk to an investment advisor before taking a financial decision. 

New Fund Offer Opens on: Monday, November 10, 2025
New Fund Offer Closes on: Monday, November 24, 2025
Scheme re-opens on: Within five business days of allotment date

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