Mumbai, Feb 05: Bandhan Small Cap Fund, one of the mutual fund industry’s top-performing small-cap focused open-ended equity schemes, has doubled its assets under management (AUM) from Rs 10,000 crore in April 2025 to Rs 20,000 crore in February 2026, underscoring strong and sustained investor confidence in its investment approach.
As it comes up on its 6th anniversary this month, its sharp rise in AUM reflects growing trust in the fund managers’ disciplined strategy of building a well-diversified small-cap portfolio. The scheme maintains a balanced risk profile, with its top 10 stock holdings accounting for less than 30% of the portfolio, spreading investments across multiple sectors to manage liquidity and fundamental risks inherent in small-cap investing.
Strong market outlook and disciplined stock selection
In its commentary for the quarter ended December 2025, Bandhan Mutual Fund highlighted its constructive outlook on equities, stating, “We expect domestic equities to continue to perform as earnings improve, both locally and globally. This makes a bottom-up stock-picking approach crucial for sustained outperformance.”
The fund managers further added, “We maintain a relatively higher cash position and have seen strong inflows during this quarter. Our focus remains on identifying new investment ideas and deploying capital gradually, especially in small caps, where trading volumes can be limited. Overall, we remain positive on the small-cap space for the long term.”
Investment philosophy and risk-adjusted performance
Managed by Kirthi Jain, Ritika Behera and Manish Gunwani, the Bandhan Small Cap Fund follows an absolute-return oriented approach rather than a purely benchmark-centric strategy. This philosophy is reflected in the scheme’s low portfolio turnover ratio of 0.21, indicating patient capital allocation and long-term conviction in stock selection.
The fund has also demonstrated strong risk-adjusted performance, with a Sharpe ratio of 1.32, highlighting its ability to generate superior returns for every unit of risk undertaken.
Sector positioning and portfolio characteristics
As of end-December 2025, the fund’s top overweight sectors included realty, financial services, and textiles, while its top underweight sectors were capital goods, construction, auto, and auto equipment. This selective sector allocation is aligned with the fund managers’ bottom-up view on earnings visibility and valuation comfort.
Consistent long-term outperformance
The Bandhan Small Cap Fund has outperformed its benchmark over the 1-, 3-, and 5-year periods, turning Rs 10,000 invested at inception into Rs 46,374 as of end-December 2025. As the scheme approaches its sixth anniversary, it has delivered compounded annual returns of 29.47% over the past three years and 25.46% over the past five years.
Investor accessibility
Investors can begin a Systematic Investment Plan (SIP) in the scheme with a minimum investment of just Rs 100 and in multiples of Rs 1 thereafter , making it accessible to a wide base of long-term investors seeking exposure to India’s small-cap growth opportunity.
With disciplined portfolio construction, strong risk management, and consistent performance, the Bandhan Small Cap Fund continues to strengthen its position as a preferred choice in the small-cap equity category.