This small-cap mutual fund challenges Quant’s small-cap fund dominance: NAV of Rs 38; with a monthly SIP of Rs 10,000 turning into Rs 1,70,500 in just one year!

Small-cap fund has matched the Quant Small-cap Fund in terms of absolute returns for the past one year.

The accolades showered upon the performance of the Quant Small-Cap Mutual Fund resound loudly among investors. Yet, unbeknownst to many, there exists another formidable contender in this category that has rivaled the achievements of the aforementioned juggernaut: the Bandhan Small-cap Fund - Direct Plan - Growth. As of February 27, 2024, its Net Asset Value (NAV) stands at Rs 38.099, boasting a remarkable 76.96 per cent return over the past year. Since its inception in 2020, it has surged an impressive 281 per cent.

Remarkably, a modest monthly Systematic Investment Plan (SIP) of Rs 10,000 in the Bandhan Small-cap Fund- Direct Plan – Growth would have burgeoned to Rs 1,70,500 with a total investment of merely Rs 1,20,000 over the course of one year.

Turning our attention to the Goliath of this arena, the Quant Small-cap Fund - Direct Plan - Growth, its NAV sits at Rs 258.216 as of February 27, 2024, boasting a fund size of Rs 15,663.84 crore, constituting 6.33 per cent of investments in the category. Delivering a commendable 76.96 per cent return over the past year and an astounding 657.02 per cent since its inception in 2013, it stands as a testament to its enduring performance.

Comparatively, the Bandhan Small-cap Fund has matched the Quant Small-cap Fund in terms of absolute returns for the past one year. However, when evaluating SIP returns, a notable discrepancy arises. While the Bandhan Small-cap Fund yielded Rs 1,70,500 for a monthly SIP of Rs 10,000, the Quant Small-cap Fund produced Rs 1,72,433.

Several factors may account for this disparity:

1. NAV Fluctuations: Daily variations in the NAV, reflective of underlying asset performance, can impact SIP returns despite similar overall annual returns.

2. Timing of SIP Investments: The timing and frequency of SIP investments, influenced by market fluctuations, can lead to nuanced differences in returns even when annualized returns are comparable.

In my experience, these factors often play a significant role in shaping SIP returns.

Regarding asset allocation, the Bandhan Small-cap Fund allocates 91.47 per cent of its investments to domestic equities, with 2.6 per cent in Large Cap stocks, 17.02 per cent in Mid Cap stocks, and 50 per cent in Small Cap stocks. Conversely, the Quant Fund allocates 92.42 per cent to domestic equities, with 13.84 per cent in Large Cap stocks, 6.96 per cent in Mid Cap stocks, and 47.39 per cent in Small Cap stocks. Additionally, it holds 1.01 per cent investment in Debt, primarily in Government securities.

Disclaimer: The article is for informational purposes only and not investment advice.