Bandhan Fund Earns 5-Star Rating After Mid/Small-Cap Shift

The Bandhan Large & Mid Cap Fund, formerly known as the Bandhan Core Equity Fund, has secured a 5-star rating, reflecting strong performance and significant portfolio adjustments. This fund, which manages assets worth ₹18,700 crore, notably altered its investment approach in late 2023, moving away from a conservative stance.

This strategic shift involved a greater allocation towards mid- and small-cap stocks, alongside a concentrated focus on the financial services sector. The fund’s active stock-picking strategy, with an active share of 57% against the Nifty LargeMidcap 250 TRI benchmark, aims for market outperformance.

Portfolio Allocation & Key Metrics

• Mid- and small-cap stocks now comprise approximately 57.1% of the total portfolio.
• The financial services sector accounts for about 38.1% of its holdings.

As of July 21, 2026, the fund has demonstrated competitive long-term returns. It delivered an annual return of 16.59% over five years, significantly surpassing the category average by 3.28 percentage points.

Its three-year SIP return stands at 10.47% XIRR, outperforming both the category average of 9.09% and the benchmark at 8.70%. Historically, the fund has maintained top-quartile performance over both seven- and ten-year periods.

Risk Profile and Outlook

The aggressive allocation to mid- and small-cap companies introduces higher risk and volatility. The fund has experienced substantial market drawdowns, including a nearly 40% decline over the past decade.

• The fund recorded two instances of 18-19% drops.

Analysts view this fund as a ‘core-plus’ component, suggesting investors balance it with more stable, large-cap schemes. The expense ratio is 0.45% for the direct plan and 1.42% for the regular plan.

Future performance hinges on its management of mid-cap volatility and the success of its financial sector bets. This balanced approach will determine sustained outperformance in a dynamic market environment.