Bandhan MF looks to go beyond smallcaps, plans first active microcap fund

Bandhan Mutual Fund is looking to launch the first active microcap fund. The fund house has filed papers with the Securities and Exchange Board of India (Sebi) for an equity scheme, which will invest in stocks of companies having a market capitalisation (m-cap) lower than 50 per cent of the smallest midcap company (as per AMFI stock classification).

As per the latest classification, the smallest midcap company is Whirlpool with an m-cap of Rs 17,400 crore.

Motilal Oswal MF was the first to launch a passive microcap fund. The index fund tracks the Nifty Microcap 250 Index.

The Bandhan MF Microcap Fund will have the Nifty Microcap 250 TRI as its benchmark.

HDFC MF was the first to file for an active microcap scheme in January 2023. However, the scheme was not launched.

The microcap segment of the market is starting to catch MFs' fancy amid growing investor interest in smallcap funds. The smallcap category has been raking in record inflows following strong performances in recent years.