Bandhan Mutual Fund provides attractive small-cap fund option for investors looking to earn optimal returns over the long term. The mutual fund offers retail and HNI investors the opportunity to participate in India’s high-growth story by investing in high-potential small and mid-sized companies through its small cap mutual funds.
Understanding Bandhan Small Cap Fund
Bandhan Small Cap Fund, available in regular and direct plan versions, predominantly invests in equity and equity-related instruments of small-cap companies as defined by SEBI. Some key features of the fund:
- Fund Manager: The fund is managed by an experienced fund management team with over years of experience in equity research and fund management
- Investment Objective: To generate long-term capital appreciation by investing predominantly in small-cap stocks
- Investment Strategy: Follows a bottom-up stock selection approach to build a concentrated portfolio of 20-25 high-conviction small-cap ideas across market caps and sectors
- Minimum Investment: Rs 1000 and in multiples of Re 1 thereafter
Attractive Returns Over Long-Term
Bandhan Small Cap Fund has delivered outstanding returns over the past 3 years, significantly beating its benchmark index. As per the latest data available:
- The regular growth plan has provided 70.57% returns over the last 1 year, outperforming its benchmark BSE Small Cap TRI by over 15%
- Over the 3 years, the fund has delivered 27.31% compounded annual returns, beating the BSE Small Cap TRI benchmark returns
- Since inception on February 26, 2020, it has provided 38.49% returns on investment
An investment of Rs 10,000 made three years ago would now be worth Rs 20,648, nearly two times its current value. The current value of an investment of Rs 10,000 made since inception is over Rs 41,090.
Why Invest in Bandhan Small Cap Fund
Here are some of the key benefits one gets when they invest in small cap fund of Bandhan Mutual Fund:
- Exposure to high-growth potential small caps: The Fund provides access to most promising small companies in a risk-optimised way
- Wealth creation over the long term: Historically, small caps have created significant wealth for investors over 7-10-year periods
- Active fund management: Backed by a qualified and experienced fund management team with a proven track record
- Liquidity advantage of open-ended fund: Allows entry/exit from the fund anytime
- Diversification benefits: Invests across market sectors to reduce concentration risk
With assets worth Rs 5,880 crore invested in it as on June 30, 2024, it is a reasonably sized fund in its category. The expense ratio is pretty competitive too, at 1.77% for the regular plan. This means that annual fund management fees and operating expenses amount to 1.77% of the investment amount.
If one were to redeem their money within a year, exit loads of 1% would apply. This is a fee charged to discourage short-term withdrawals. But given that small caps tend to be volatile in the short run, this fund is meant for longer time horizons.
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