Bandhan Multi-Factor Fund NFO July 2025: Key Details, Strategy & Benefits

The Bandhan Multi-Factor Fund is an open-ended thematic equity fund that adopts a multi-factor quantitative model to select stocks. Aimed at achieving medium to long-term capital appreciation, it invests primarily in equity and equity-related instruments. This NFO is designed for investors seeking a data-driven and diversified investment approach using academically validated factors such as momentum, low volatility, quality, value, and size. With an emphasis on adapting to evolving market conditions, it strives to offer consistent returns while managing risk across economic cycles. The fund leverages a proprietary model to identify top-performing large and mid-cap companies from a carefully constructed universe of the top 250 stocks.

Key Features of Bandhan Multi-Factor Fund

• Opening Date: July 10, 2025
• Closing Date: July 24, 2025
• Exit Load: 0.50% if redeemed within 30 days; Nil after 30 days
• Minimum Investment: ₹1,000 (lumpsum); ₹100 (SIP with minimum 6 instalments)

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Objective of Bandhan Multi-Factor Fund

The objective of the Bandhan Multi-Factor Fund - Direct (G) is to generate medium to long-term capital appreciation by investing predominantly in equity and equity-related securities selected through a multi-factor quantitative model.

Investment Strategy of Bandhan Multi-Factor Fund

• Follows a multi-factor model incorporating Momentum, Value, Low Volatility, Quality, and Size
• Constructs a diversified portfolio from the top 250 companies, primarily large and mid-cap
• Applies equal weightage across core factors but allows dynamic stock selection based on market cycles
• Focuses on risk-adjusted returns and consistent performance across economic phases
• Leverages academic and empirical validation to select enduring and high-performing factors

Risks Associated with Bandhan Multi-Factor Fund

• Thematic exposure increases concentration risk and restricts diversification
• Market volatility and economic shifts may impact equity returns significantly
• Liquidity constraints in low-volume stocks may delay exits or reduce profits
• Derivatives and covered call writing strategies involve added complexity and specialised risk
• Sector underperformance or global economic disruptions may lead to adverse NAV movements
• No assurance of the factor-based model outperforming traditional benchmarks in all market phases

Risk Mitigation Strategy by Bandhan Multi-Factor Fund

• The Bandhan Multi-Factor Fund - Direct (G) employs a comprehensive risk management strategy involving active monitoring and diversified portfolio construction. It seeks to minimise equity risk by using derivatives for hedging and balancing.
• Liquidity risk is addressed by investing in financially sound, high-quality, and highly traded stocks.
• For debt investments, market risk is managed by adjusting maturity profiles according to interest rate forecasts.
• Credit and reinvestment risks are controlled through issuer evaluations and cautious allocation to government and liquid securities. Derivative transactions are closely monitored with adequate internal controls.
• The fund also manages volatility through adaptive asset allocation and maintains transparency in all operations.

What Type of Investor Should Invest in Bandhan Multi-Factor Fund?

• Investors with a medium to long-term horizon
• Those looking for a quant-driven approach to equity investing
• Suitable for moderate to high-risk takers seeking equity-linked returns
• Investors aiming for diversified exposure across factor styles like value, quality, and momentum
• Those interested in data-backed models for enhanced decision-making

Where Will the Bandhan Multi-Factor Fund Invest?

• Predominantly in equity and equity-related instruments using a multi-factor model
• Investments focused on large and mid-cap companies across sectors
• Exposure to debt and money market instruments for liquidity and balance
• May include equity warrants, convertible instruments, and derivatives
• Investments in government and corporate bonds, as well as securities issued by financial institutions