Clear, investment-grade insights explaining why Mirae Asset Small Cap Fund outperformed Bandhan Small Cap Fund in the last one year, despite Bandhan’s strong long-term record.

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Performance Snapshot (Context)

• Bandhan Small Cap Fund

  • 3-Year CAGR: 32.50% p.a.

  • 5-Year CAGR: 25.94% p.a.

  • 1-Year Return: 9.51%

• Mirae Asset Small Cap Fund

  • 1-Year Return: 15.25% (significantly higher than Bandhan)

The divergence in recent performance is largely portfolio-structure driven, not a deterioration in Bandhan’s long-term strategy.

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Sector Allocation Comparison (Small Cap Funds)

Sector-wise Portfolio Exposure (%)

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Why Mirae Asset Small Cap Fund Outperformed (Key Insights)

1️⃣ Stronger Alignment with India’s Capex & Manufacturing Cycle

Mirae’s 18.53% allocation to Industrials, compared with just 8.71% for Bandhan, proved decisive.

• Capital goods, engineering, defence ancillaries and infrastructure-linked small caps outperformed sharply over the last year.

• Bandhan’s underweight here directly limited upside participation.

→ Clear performance tailwind for Mirae

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2️⃣ Lower Exposure to Defensive & Low-Momentum Sectors

Bandhan maintained higher allocations to Consumer Staples, Utilities and Real Estate—sectors that:

• Lagged during the recent risk-on, earnings-driven rally

• Offered stability, but not alpha

Mirae stayed light on defensives, keeping the portfolio growth-oriented.

→ Mirae benefited from higher portfolio beta

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3️⃣ Real Estate Overweight Hurt Bandhan in the Short Term

Bandhan’s 7.40% exposure to Real Estate (vs 2.18% for Mirae) worked against it.

• Small-cap real estate stocks saw selective profit booking

• Rising funding costs and valuation concerns capped returns

→ Tactical drag on Bandhan’s 1-year performance

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4️⃣ Better Participation in Healthcare & Financial Small Caps

Mirae held higher Healthcare exposure (13.82%) and Financials (25.49%), sectors that:

• Delivered earnings visibility

• Benefited from domestic demand and balance-sheet cleanups

Bandhan’s relatively lower exposure reduced upside capture.

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5️⃣ Portfolio Concentration vs Stability Trade-off

• Mirae Asset Small Cap Fund: More focused, cyclical, growth-led positioning

• Bandhan Small Cap Fund: More balanced and risk-controlled allocation

In a momentum-driven year, concentration paid off.

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Bottom Line for Investors

• Mirae Asset Small Cap Fund

  • Better suited for cyclical upswings

  • Higher volatility, higher short-term alpha potential

• Bandhan Small Cap Fund

  • Strong long-term compounding credentials

  • Slightly conservative allocation helped protect downside but capped 1-year upside

Key Takeaway:

👉 Mirae’s recent outperformance is tactical and cycle-driven, not structural superiority.
👉 Bandhan remains a solid long-term small-cap compounder, but lagged in a year favouring industrials and capex-heavy themes.

 

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