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Introducing Bandhan Nifty Small cap 250 Index Fund – NFO, a new open-ended index fund aiming to mirror the performance of the Nifty Small cap 250 Index. Launched on December 12, 2023, it invests in the same companies and proportions as the index, offering investors a low-cost way to tap into the potential of smaller Indian businesses. With a minimum investment of Rs 1,000 and no-load charges, this fund is accessible and attractive for both seasoned and new investors seeking exposure to the small-cap market. The NFO closes on December 19th, 2023.
The investment objective of the Scheme is to replicate the Nifty Small cap 250 Index by investing in securities of the Nifty Small cap 250 Index in the same proportion/weightage to provide returns before expenses that track the total return of Nifty Small cap 250 Index, subject to tracking errors.
Benchmark – Nifty Small cap 250 TRI
| Instruments | Indicative Allocation | Risk Profile |
| Securities belonging to the Nifty Small cap 250 Index (including stock & index derivatives) | Minimum 95% – Maximum 100% | Very High |
| Debt & Money Market instruments | 0% – 5% | Low to Moderate |
The scheme’s net assets will be invested in stocks that comprise the Nifty Small cap 250 Index. This would be accomplished by investing in all of the stocks that comprise the Nifty Small cap 250 Index with the same weightage that they do in the Nifty Small cap 250 Index. Exposure in Equity Derivatives shall be up to 20% of the equity exposure.
India stands out amongst major markets by boasting the highest proportion of “multibagger” stocks, defined as those delivering 10-fold returns within a 5-year rolling window over the past two decades. This impressive feat translates to over half, or 269, of the top 500 stocks achieving this remarkable growth. While historically dominated by small-cap companies, this trend highlights India’s potential for generating exceptional returns across various market segments.
Several stocks transformed from small-cap segment to mid-cap segment post-Covid primarily named Tata Elxsi Ltd., Deepak Nitrite Ltd., Navin Fluorine Ltd., Dixon Technologies, Kajaria Ceramics Ltd etc where one stock named Tube Investment Ltd jumped to the large-cap segment. This NFO seems a better option to dive into the small-cap investments
| Parameter | Periodicity | Large Cap | Mid Cap | Small Cap |
| Annualized Returns | 1 year | 8.50% | 10.60% | 32.80% |
| 3 years | 17.20% | 17.50% | 30.00% | |
| 5 years | 14.50% | 12.70% | 21.90% | |
| 10 years | 13.90% | 15.80% | 21.70% | |
| Annualized Volatility | 1 year | 9.60% | 12.30% | 11.50% |
| 3 years | 14.60% | 16.20% | 16.20% | |
| 5 years | 19.00% | 18.70% | 18.70% | |
| 10 years | 16.40% | 17.70% | 17.40% |
Nemish Sheth (Associate Vice President – Equity), Age: 36 years, Experience: Total 12 years
| Scheme Name | AuM (Rs. Cr) | 6M | YTD | 1Y | 2Y | 3Y |
| Motilal Oswal Nifty Smallcap 250 Index Fund – Direct Plan – Growth | 512.15 | 34% | 43% | 40% | 18% | 32% |
| Edelweiss Nifty Large Mid Cap 250 Index Fund – Direct Plan – Growth | 73.47 | 22% | 27% | 24% | 14% | – |
| Edelweiss Nifty Smallcap 250 Index Fund – Direct Plan – Growth | 21.00 | 33% | 43% | 40% | – | – |
| SBI Nifty Smallcap 250 Index Fund – Direct Plan – Growth | 399.37 | 33% | 43% | 40% | – | – |
| ICICI Prudential Nifty Smallcap 250 Index Fund – Direct Plan – Growth | 210.9 | 33% | 43% | 40% | 18% | – |
| Nippon India Nifty Smallcap 250 Index Fund – Direct Plan – Growth | 832.88 | 33% | 43% | 40% | 17% | 32% |
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.
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