Small Caps, Big Gains: Bandhan and ICICI Funds Lead India’s Mutual Market Surge

Market Snapshot: Mutual Funds Shine Amid Volatility

Small Caps, Big Gains: Bandhan and ICICI Funds Lead India’s Mutual Market Surge – As of September 8, 2025, India’s mutual fund market is buzzing with optimism, especially in the small cap and infrastructure sectors. Despite global uncertainties and cautious equity markets, select mutual funds have delivered exceptional returns, drawing attention from both seasoned investors and newcomers.

The standout performer today is the Bandhan Small Cap Fund, boasting a 5-year CAGR of 32.7% and a 3-year average rolling return of 34.21%. Close behind is the ICICI Prudential Infrastructure Fund, which has posted a 5-year CAGR of 35.5% and a 3-year rolling return of 34.53%.

These funds are not just riding short-term momentum—they’ve shown consistent growth, backed by strong fundamentals and sectoral tailwinds. With India’s infrastructure push and rising interest in small-cap innovation, these funds are becoming favorites for long-term wealth creation.

Sector Spotlight: Why Infrastructure and Small Caps Are Winning

The infrastructure sector is booming, thanks to government spending on roads, railways, and urban development. This has directly benefited funds like:

• ICICI Prudential Infrastructure Fund
  • AUM: ₹7,941 crore
  • Expense Ratio: 1.14%
  • 5-Year CAGR: 35.5%
  • Focus: Core infrastructure companies, engineering, and capital goods
• Bandhan Infrastructure Fund
  • AUM: ₹1,675 crore
  • Expense Ratio: 0.84%
  • 5-Year CAGR: 33.9%
  • Focus: Construction, logistics, and energy

Meanwhile, small cap funds are thriving due to India’s startup ecosystem, digital transformation, and rising domestic consumption. These funds invest in high-growth, lesser-known companies that often outperform during economic recoveries.

Top small cap performers include:

• Bandhan Small Cap Fund
  • AUM: ₹14,062 crore
  • Expense Ratio: 0.40%
  • 3-Year CAGR: 30.06%
  • Focus: Emerging businesses with scalable models
• Nippon India Small Cap Fund
  • AUM: ₹65,922 crore
  • Expense Ratio: 0.64%
  • 5-Year CAGR: 33.6%
  • Focus: Diversified small cap exposure across sectors

These sectors are expected to remain strong as India continues its economic expansion, making them attractive for long-term investors.

What Makes These Funds Stand Out?

Several factors contribute to the success of today’s top-performing mutual funds:

• Low Expense Ratios: Funds like Bandhan Small Cap (0.40%) and Motilal Oswal Midcap (0.69%) offer high returns with minimal cost, boosting investor gains.
• Strong Fund Management: These funds are managed by experienced teams that actively rebalance portfolios based on market trends and company performance.
• Sectoral Tailwinds: Infrastructure and small cap sectors are benefiting from policy support, rising demand, and innovation.
• Risk-Adjusted Returns: Despite market volatility, these funds have delivered consistent returns over 3–5 years, making them reliable choices for SIPs and long-term goals.

Investors looking for growth-oriented portfolios should consider these funds, especially if they have a medium to high risk appetite and a long-term investment horizon.

Final Thoughts: Should You Invest Now?

While today’s top mutual funds are showing impressive returns, it’s important to remember that past performance doesn’t guarantee future results. Here are a few tips before investing:

• Assess Your Risk Profile: Small cap and infrastructure funds can be volatile. Make sure your financial goals align with the fund’s strategy.
• Diversify Your Portfolio: Don’t put all your money into one sector. Mix large cap, mid cap, and debt funds for balanced growth.
• Use SIPs for Discipline: Systematic Investment Plans help you invest regularly and reduce the impact of market fluctuations.
• Consult a Financial Advisor: Before making any investment, get professional advice tailored to your needs.

India’s mutual fund landscape is evolving fast, and today’s winners may shape tomorrow’s wealth stories. Whether you’re a first-time investor or a seasoned pro, keeping an eye on high-performing funds like Bandhan Small Cap and ICICI Infrastructure could be your ticket to smarter investing.

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