Bandhan Mutual Fund launches Nifty Smallcap 250 Index Fund; all you need to know

What kind of mutual fund scheme is this?

This is an open-ended fund that tracks the Nifty Smallcap 250 Index comprised of stocks ranked 251-500 by market capitalization. The fund presents an opportunity to tap into potential multi-baggers and emerging businesses via passive investing.

Emphasizing why investors should consider investing in the Bandhan Nifty Smallcap 250 Index Fund, Vishal Kapoor, CEO, Bandhan AMC said, “Poised to benefit from emerging themes across various sectors, small caps are well positioned to deliver outsized gains during bull markets. To benefit from this opportunity, smart investors could choose an index fund that tracks the small-cap universe, instead of chasing the best performing actively-managed small-cap funds. The one-year annualized returns of the index stood at 32.8% as of November 30, 2023, indicating strong performance, albeit higher volatility. Investors seeking to uncomplicate investing in the small-cap segment, while keeping the cost low, could consider investing in Bandhan Nifty Smallcap 250 Index Fund.”

What is the main objective of investing in this fund?

The scheme aims to mirror the Nifty Smallcap 250 index by investing in securities of the Nifty Smallcap 250 Index with proportional weightage. It seeks to deliver returns before expenses that closely align with the total return of the Nifty Smallcap 250 Index while acknowledging the possibility of tracking errors. It’s important to note that there is no guarantee or assurance that the scheme will achieve its objectives, and it does not promise any specific returns.

How may one invest in this scheme?

Investors can invest under the scheme with a minimum investment of ₹1000 per plan/option and in multiples of Re 1. There is no upper limit for investment.

Under normal circumstances, the asset allocation of the scheme will be as follows:

Are there similar mutual funds in the market?

To date, other asset management companies (AMCs) have also launched similar funds in India. The following table illustrates the fund names along with their past three-year returns, thus, highlighting their efficacy in one’s investment portfolio.

How will the scheme benchmark its performance?

The scheme shall be benchmarked to the Nifty Smallcap 250 TRI. Since the scheme is an index fund, the compositions of the benchmark are such that it is most suited for comparing the performance of the scheme.

Are there any entry or exit loads to this scheme?

This scheme involves no “Entry Load”, which means that investors do not have to pay anything to park their earnings in this scheme. The “Exit Load” would also be “Nil”.

Who will manage this scheme?

Nemish Sheth has been chosen as the dedicated fund manager of the scheme.

Does the fund contain any inherent risk?

The scheme involves “Very High Risk” as per the details mentioned in the Scheme Information Document and is best suited to investors willing to understand that their principal will be subject to very high risk only. However, investors should consult their financial advisors if they doubt whether the product is suitable for them.

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Published: 12 Dec 2023, 04:07 PM IST