Bandhan Midcap Fund: Diversification during volatility

Current Market Scenario

Markets turned volatile again due to heightened geopolitical risks and uncertainties. FII flows turned negative in September after 2 months of net inflows. Net FII outflow on a year-to-date basis is Rs 2.5 lakh crores (source: NSDL, as on 15^th September 2026). The correction can provide investment opportunities in high-quality stocks at reasonable valuations and improved earnings outlook. The macro picture of the Indian economy remains robust, with strong GDP growth of 7.8% in Q1 FY 2026-27. The fiscal deficit in the first four months of the fiscal year FY 2026-27 narrowed compared to the same period in the previous year. In the current market conditions, mid-cap funds may be suitable for long-term investors. In this article, we will discuss how Midcap Funds, particularly the Bandhan Midcap Fund, which has recently completed 4 years since its inception, can be a good addition to your portfolio.

What are Midcap Funds?

As per SEBI guidelines, midcap funds should have at least 65%of their holdings in Midcap stocks. Mid-cap companies are those that rank from 101^st to 250^th by market capitalization.

Why should you invest in Midcaps?

1. Midcaps present a broader sector diversification opportunity: Midcaps provide diverse as well as complementary sector-wide opportunities. Compared to the Large Cap index, Midcap has a broader representation across sectors. The market has broadened with the inclusion of new sectors that carry greater weightage within the Midcap segment
   
   

   

   Source: Bloomberg, Large Cap - BSE 100; Mid Cap - BSE 150 Mid Cap. Data as on Aug’26. Data shows the %age allocation sector-wise. Past performance may or may not be sustained in the future and does not guarantee any future returns. Sectors/ Stocks mentioned here should not be construed as a recommendation from Bandhan Mutual Fund.



2. Midcap Segment comprises high growth sectors
   
   

   

   The sectors/stocks mentioned herein are only for illustrative purposes and should not be construed as a recommendation from Bandhan Mutual Fund. Performance of the above sectors/stocks should not be construed as indicative yield of any of the schemes of Bandhan Mutual Fund. Bandhan Mutual Fund may or may not hold any position in these sectors/stocks in future. Past performance may or may not be sustained in the future and does not guarantee future return



3. Midcaps have established relatively stronger performance over the longer horizon. The chart below shows the returns from large cap, midcap and small caps over different timeframes. You can see that the Midcaps have outperformed both the other two market caps across different long term time horizons.
   
   

   

   Source: ICRA MFI. Large Cap - BSE 100 TRI; Mid Cap - BSE 150 Mid Cap TRI; Small Cap - BSE 250 Small Cap TRI The period considered - 3, 5 & 10 years. Data as on Aug’26. Returns are CAGR (%). The above graph shows the performance as an average of various periods (3, 5 & 10 years). Past performance may or may not be sustained in the future and does not guarantee future returns



4. Better Risk-Adjusted Returns
   
   

   

About Bandhan Midcap Fund

The Bandhan Midcap Fund focuses on building a diversified portfolio with presence in unique niche businesses and category leaders, not present in large caps. The Bandhan Midcap Fund was launched in August 2022 and has given a return of 17.51% CAGR return since inception. The chart below shows the returns of the Bandhan Midcap Fund Vs the benchmark BSE Midcap 150 TRI index.

Source: Advisorkhoj Research as of 31^st August 2026

Rolling Returns Vs Category

The chart below shows the 3-year rolling returns of the Bandhan Midcap Fund Vs the midcap category since the launch of the fund. You can see that the Bandhan Midcap Fund has outperformed the category average most of the time.

Source: Advisorkhoj Research as of 21^st September 2026

Investment Philosophy

The Fund follows a stock selection approach using the 5-filter framework factors like Governance/ Sustainability, capital efficiency, Competitive Edge, Scalability, and Acceptable risk/ reward, that focusses on quality along with growth. It intends to maintain an active share range of up to 70%.

Stock Selection Process: The 5-Filter Approach

Source: Bandhan AMC, Fund ppt Above mentioned framework is part of the portfolio stock selection approach. The selection however would be evaluated on an ongoing basis.

Portfolio Construction

The fund managers are Ritu Modi (equity portion) Mr. Harshal Joshi (debt portion). Ms. Ritika Behera & Mr. Gaurav Satra manage the overseas investment portion of the scheme. The fund managers aim to include compelling opportunities from the broader universe

Source: Bandhan AMC, Fund ppt Above mentioned framework is part of the portfolio stock selection approach. The selection however would be evaluated on an ongoing basis.

Sector Allocation: Fund Vs Index

The chart below shows the Overweight/underweight position of the sector allocation between the Bandhan Midcap Fund and the Nifty 150 Midcap index. The fund managers have maintained a diversified portfolio with an overweight allocation in high-growth sectors like Capital Goods, Consumer Services, and Healthcare.

Source: Bandhan AMC, data as on 31^st August 2026. The above-mentioned framework is part of the portfolio stock selection approach. The selection however, would be evaluated on an ongoing basis.

Current Portfolio

Source: Fund Factsheet as on 31^st August 2026

Who should invest in Bandhan Midcap Fund?

• Investors looking for capital appreciation and wealth creation.


• Investors should have at least a 5-year investment horizon in this scheme.


• Investors with a very high-risk appetite.


• Investors can invest in this scheme either through lump sum or SIP depending on your investment needs.

Investors should consult their financial advisors or mutual fund distributors if Bandhan Midcap Fund is suitable for their long-term investment needs.