The Bandhan Large & Mid Cap Fund has earned a 5-star rating, reflecting improved performance and strategic shifts in its ₹18,700 crore portfolio. The fund has outperformed its benchmark by focusing on financial stocks and increasing its mid-cap exposure. Investors should note that the fund's aggressive strategy brings higher volatility, making long-term SIPs a more suitable approach than lump-sum investments.
Detailed Coverage
The Bandhan Large & Mid Cap Fund, formerly known as the Bandhan Core Equity Fund, has reached a 5-star rating, signaling a period of strong performance. Managing assets worth ₹18,700 crore, the fund has shifted its strategy significantly since late 2023. By moving away from a conservative approach, the fund has increased its allocation to mid- and small-cap stocks, which now make up approximately 57.1% of its total portfolio.
Strategic Portfolio Shifts and Sector Focus
The fund’s current strategy leans heavily into the financial services sector, which accounts for about 38.1% of its holdings. This concentration in financial stocks, combined with an active share of 57% against the Nifty LargeMidcap 250 TRI benchmark, shows that the fund manager is actively picking stocks to outperform the broader market index rather than simply tracking it. This departure from its past investment style has been a primary factor in its recent improved rankings.
Performance and Historical Context
As of July 21, 2026, the fund demonstrated competitive long-term returns. Over a five-year period, it delivered an annual return of 16.59%, which is 3.28 percentage points higher than the category average. Similarly, its three-year SIP return stands at 10.47% XIRR, outperforming both the category average of 9.09% and the benchmark return of 8.70%. Historically, the fund has maintained a top-quartile performance ranking over seven- and ten-year periods, suggesting a consistent ability to generate returns over longer market cycles.
Understanding the Risks
The fund’s strategy of aggressive allocation to mid- and small-cap companies introduces a higher level of risk compared to pure large-cap funds. Data indicates that the fund has experienced significant market drawdowns, including a decline of nearly 40% at one point over the past decade, alongside two separate instances of 18-19% drops. These numbers reflect the inherent volatility of smaller-sized businesses during market corrections.
Because of this volatility, the fund is generally viewed by analysts as a 'core-plus' component of an investment portfolio rather than a single-fund solution. Investors may need to balance this holding with more stable, large-cap-oriented schemes to manage overall portfolio risk. With an expense ratio of 0.45% for the direct plan and 1.42% for the regular plan, the costs remain within the standard range for the industry. Moving forward, the most important factors for investors to monitor will be the fund's continued management of mid-cap volatility and the performance of its concentrated financial sector bets, especially during periods of broader market stress.