The Bandhan Small Cap Fund is one of the fastest growing small-cap mutual funds in India. It focuses on investing in emerging companies with high growth potential and aims to generate long-term capital appreciation.
Small-cap funds are known for higher volatility but also offer the potential for strong wealth creation over long investment horizons.
Bandhan Small Cap Fund Overview
| Fund Category | Small Cap Equity Fund |
|---|---|
| Fund House | Bandhan Mutual Fund |
| Benchmark | BSE 250 SmallCap TRI |
| Risk Level | Very High |
| Minimum SIP | ₹500 |
| Minimum Lumpsum | ₹1,000 |
| Exit Load | 1% if redeemed within 1 year |
Bandhan Small Cap Fund Returns
| Period | Average Returns |
|---|---|
| 1 Year | ~2% |
| 3 Years | ~30% CAGR |
| 5 Years | ~26% CAGR |
| Since Launch | ~31% CAGR |
Note: Past performance does not guarantee future returns.
Fund Size (AUM)
The Assets Under Management (AUM) of the fund has grown significantly and is currently around ₹19,000+ crore. This shows increasing investor confidence in the fund.
Portfolio Allocation
- Small Cap Stocks – 65% to 80%
- Mid Cap Stocks – 10% to 20%
- Cash & Others – Remaining allocation
The fund focuses on high-growth sectors such as:
- Industrial manufacturing
- Financial services
- Specialty chemicals
- Consumer discretionary
- Technology
Expense Ratio
| Plan | Expense Ratio |
|---|---|
| Direct Plan | ~0.47% |
| Regular Plan | ~1.63% |
Investors looking to reduce costs may prefer the Direct Plan.
Taxation on Small Cap Mutual Funds
Short Term Capital Gain (STCG)
- If units are sold within 1 year
- Tax rate: 20%
Long Term Capital Gain (LTCG)
- If units are held for more than 1 year
- Tax rate: 12.5% on gains above ₹1.25 lakh
SIP Investment Example
Let us understand wealth creation using SIP.
| Monthly SIP | ₹10,000 |
|---|---|
| Investment Period | 10 Years |
| Expected Return | 12–14% |
| Estimated Corpus | ₹23 – ₹26 Lakhs |
Who Should Invest in Bandhan Small Cap Fund?
- Investors with long-term horizon (7–10 years)
- Investors seeking high growth potential
- Investors with high risk tolerance
- Investors who want exposure to emerging companies
Risks to Consider
- High market volatility
- Small company business risk
- Economic slowdown impact
- Short term price fluctuations
Therefore, investors should allocate only a limited portion of their portfolio to small-cap funds.
How to Invest in Bandhan Small Cap Fund
You can invest through multiple platforms:
- Official AMC website
- Mutual fund investment apps
- Registered mutual fund advisors
You can choose either:
- SIP (Systematic Investment Plan)
- Lumpsum Investment
Useful Resources
- Bandhan Mutual Fund Official Website
- Association of Mutual Funds in India (AMFI)
- SEBI – Mutual Fund Regulations
Related Mutual Fund Articles
- ICICI Prudential Technology Fund Review
- HDFC Balanced Advantage Fund Review
- Axis Multicap Fund Review
- Direct vs Regular Mutual Funds
Coclusion
The Bandhan Small Cap Fund is a strong option for investors seeking long-term wealth creation through small-cap companies. While the fund offers high growth potential, investors should be prepared for volatility and invest with a long-term horizon.
Investment Horizon: 7–10 Years
Risk Level:</strong Very High
Suitable For:</strong Long-term growth investors
Disclaimer:</strong Mutual fund investments are subject to market risks. Please read all scheme related documents carefully before investing.
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