Bandhan Small Cap Fund Direct Transfer of Income Distribution cum capital withdrawal Plan

Bandhan Small Cap Fund earns a Below Average Process Pillar rating.

The process benefits from the fund's strong long-term risk-adjusted performance. This can be seen in its five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. However, the rating is held back by its parent firm's disappointing risk-adjusted performance, as shown by the firm's average 10-year Morningstar Rating of 2.2 stars. A lower star rating suggests that the firm has struggled to outperform on a risk-adjusted basis. The parent firm's five-year risk-adjusted success ratio of 26% also holds the rating back. The measure indicates the percentage of a firm's funds that have beat their respective category's median return for the period. The parent's subpar success ratio suggests that the firm could do better across its fund lineup.

This strategy targets deeper value plays than its peers’ average in the Small-Cap Morningstar Category. But in terms of size exposure, it is similar to the average. Examining additional factor exposure, this strategy has consistently favored low-quality stocks compared with Morningstar Category peers over the past few years. Such positions do not tend to provide much ballast for a portfolio. In the latest month, the strategy was also less exposed to the Quality factor compared with Morningstar Category peers. This strategy has also been exposed to liquid stocks during these years. More-liquid assets contribute to more-flexible exit strategies without price changes and tend to be a ballast during market selloffs. For example, if the portfolio faces successive redemptions in a short period of time, it will be less likely to experience a significant loss. Compared with category peers, the strategy also had more exposure to the Liquidity factor in the most recent month. In addition, this strategy has exhibited a tilt toward higher-volatility stocks in these years, meaning companies that have a higher historical standard deviation of returns compared with peers. Such exposure tends to pay off when markets are hot and to be costly when they are not. In this month, the strategy also had more exposure to the Volatility factor over its peers. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section.

The portfolio is overweight in real estate and financial services relative to the category average by 5.9 and 5.7 percentage points, respectively. The sectors with low exposure compared with category peers are industrials and consumer cyclical, underweight the average by 7.0 and 3.2 percentage points of assets, respectively. The portfolio is positioned across 187 holdings and is relatively concentrated. Specifically, 20.3% of the strategy's assets are housed within the top 10 holdings, as opposed to the typical peer's 13.7%. And finally, in terms of portfolio turnover, on a year-over-year basis, 89% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.