Bajaj Life Small Cap Fund: Features & Review 2026

Overview

Bajaj Life Small Cap Fund is a high-growth equity fund offered within Bajaj Life’s Unit-Linked Insurance Plan (ULIP) portfolio. Launched in May 2023, it aims for long-term capital appreciation by investing predominantly in small cap companies and carries a ‘Very High’ risk classification. Sujit Jain is the current fund manager.

Fund Performance Profile (As of September 2, 2026)

Net Asset Value (NAV): ₹21.757
Assets Under Management (AUM): Exceeds ₹5,000 crore
Annualized Return: 26.44% since inception
Compound Annual Growth Rate (CAGR): 23.09% over 3 years, 2.78% over 2 years, 9.42% over 1 year, 13.71% over 6 months, and 9.20% over 3 months
Benchmark: NIFTY Smallcap 100 Index

However, as a ULIP fund, assess its market-linked returns alongside applicable policy charges, the lock-in period, and the insurance structure. Past performance does not guarantee future returns.

Launched on 23 May 2023 and benchmarked against the NIFTY Smallcap 100 Index, the Bajaj Life Small Cap Fund is designed for investors willing to embrace high volatility in pursuit of long-term wealth creation through small cap equities.

In the next few minutes, you'll discover how the Bajaj Life Small Cap Fund works, where it invests, how it has performed since inception, and the risks and charges you should consider before investing.

What Is the Bajaj Life Small Cap Fund?

The Bajaj Life Small Cap Fund is not a standalone mutual fund that you can purchase directly. Instead, it is an equity fund available within Bajaj Life's ULIP offerings. This means your money is invested through a ULIP structure, with the fund value linked to the performance of its underlying portfolio and reflected through its daily Net Asset Value (NAV).

The fund aims to achieve capital appreciation by investing in a diversified basket of predominantly small cap stocks, with Bajaj Life specifying a minimum 60% allocation to small-cap stocks. As with other market-linked ULIP funds, the policyholder bears the investment risk, and the fund value can rise or fall with market conditions.

Note: The Bajaj Life Small Cap Fund is available only through eligible Bajaj Life ULIP products. You cannot purchase it independently.

What Does Bajaj Life Small Cap Fund Invest In?

The Bajaj Life Small Cap Fund follows a diversified equity investment approach, with its portfolio spread across companies from different sectors. The fund primarily invests in small cap stocks, while also holding mid cap and large cap companies.

As of July 2026, the fund's equity portfolio was allocated as follows:

Market Capitalization	Allocation
Small Cap Stocks	65.10%
Mid Cap Stocks	32.80%
Large Cap Stocks	2.10%

The fund also held 2.79% in bank deposits and money market instruments, while net current assets accounted for negative 0.16%. Overall, equities made up 97.37% of the portfolio.

In terms of individual holdings, the fund's largest exposures included Sona BLW Precision Forgings Ltd. (3.01%), Radico Khaitan Ltd. (2.78%), Karur Vysya Bank Ltd. (2.58%), CarTrade Tech Ltd. (2.45%), and Balkrishna Industries Ltd. (2.28%). The portfolio also included Devyani International, Multi Commodity Exchange of India, CRISIL, City Union Bank, and Coforge.

By sector, the fund had its largest exposure to Financial and Insurance Activities at 23.00%, followed by Computer Programming, Consultancy and Related Activities at 9.57% and Manufacture of Electrical Equipment at 6.03%.

Bajaj Life Small Cap Fund Performance and NAV Trends

Here’s a look at the Bajaj Small Cap Fund performance across different periods:

Latest NAV: The Bajaj Small Cap Fund NAV stood at ₹21.757 as of 2 September 2026. This represents the value of a single unit of the fund.

A ₹100 investment made since inception grew to ₹211 in the fund, compared with ₹193 in the benchmark, by July 2026.

Strong Long-Term Performance: Since its inception in May 2023, the fund has delivered a 26.44% annualized return, compared with 23.15% CAGR for the NIFTY Small Cap 100 Index.
Strong 3-Year Outperformance: Over the 3-year period, the fund delivered a 23.09% CAGR, compared with 18.21% for the NIFTY Small Cap 100 Index.
Mixed Recent Performance: As of 31 July 2026, the fund returned 9.20% over 3 months, 13.71% over 6 months, and 9.42% over 1 year.
Healthy Fund Size: The fund had an AUM of ₹5,063.85 crore as of 31 July 2026, with ₹4,930.74 crore invested in equity.

The above data is derived from Fund Pro data for July 2026.

Note: The fund has a relatively short track record, having been launched in May 2023. Therefore, evaluate its historical returns with this limited performance history in mind.

Bajaj Life Small Cap Fund Benchmark: NIFTY Small Cap 100

The Bajaj Life Small Cap Fund is benchmarked against the NIFTY Smallcap 100 Index, which provides the reference point for evaluating the fund's performance. If you are looking to compare Bajaj Life Small Cap with other small-cap investment options, consider factors such as historical performance, risk, charges, liquidity, and the additional restrictions of the ULIP structure.

Bajaj Life's July 2026 Fund Pro data gives:

Period	Small Cap Fund	NIFTY Smallcap 100	Result
6 Months	13.71%	14.58%	Fund lagged
1 Year	9.42%	7.64%	Fund outperformed
2 Years	2.78% CAGR	0.53% CAGR	Fund outperformed
3 Years	23.09% CAGR	18.21% CAGR	Fund outperformed
Since Inception	26.44% CAGR	23.15% CAGR	Fund outperformed

Note: Past performance is not indicative of future returns.

Bajaj Life: Performance Metrics

Key Performance Metric	Bajaj Life Average (Average FY 2024-26)	Industry Average
Claim Settlement Ratio (CSR)	99.32%	99.00% (Mean)
Amount Settlement Ratio (ASR) (Average FY 2023-25)	93.42%	94.83% (Mean)
Complaint Volume (Per 10,000 Claims)	2.77	13.10 (Median)
Solvency Ratio (IRDAI’s Minimum Requirement: 1.5x)	3.52x	2.00x (Median)
Annual Business Volume	₹12,791.02 Crore	₹3,778.58 Crore (Median)
Amount Paid in Death Claims	₹828.11 Crore	₹237.24 Crore (Median)

Note: The figures are for the life insurer as a whole and are sourced from IRDAI Annual Reports and Bajaj’s public disclosures. For more data like this, explore the Ditto Data Lab.

Talk to an expert
today and
find
the right
insurance for you.

Pros & Cons of Bajaj Life Small Cap Fund

Pros	Cons
Strong Performance Since Inception: The fund has delivered a 26.44% annualized return since inception.	Very High Risk: Bajaj Life classifies the fund as ‘Very High’ risk, reflecting the volatility associated with equity and small cap investments.
High Small-Cap Exposure: The fund is designed to invest predominantly in small cap stocks, with a minimum 60% allocation to small-cap stocks.	Limited Track Record: Launched in May 2023, the fund does not yet have a long-term track record covering multiple market cycles.
Diversified Portfolio: Despite its small-cap focus, the fund spreads investments across multiple companies and sectors rather than concentrating on a handful of stocks.	ULIP-Related Limitations: Since the fund is only available through ULIPs, investors should also consider the policy's lock-in period, charges, and other policy-level costs, rather than evaluating the fund's NAV returns alone.
Potential for Long-Term Capital Appreciation: Its predominantly small cap allocation can provide higher growth potential over long investment horizons, although this comes with higher volatility.

Note: Tax treatment depends on the ULIP’s issue date and other applicable policy conditions. From 1 April 2026, the Income-tax Act, 2025 replaced the Income-tax Act, 1961. For relevant ULIPs issued on or after 1 February 2021, maturity exemption is subject to the applicable premium-to-sum-assured ratio and an aggregate annual premium limit of ₹2.5 lakh across relevant ULIPs.

Death proceeds are treated separately. Therefore, do not assume maturity proceeds are exempt from tax solely because the annual premium for one ULIP is ₹2.5 lakh or less. Consider consulting a tax professional before relying on the exemption.

Who Should Consider the Bajaj Life Small Cap Fund?

Investors With a High Risk Appetite Seeking Aggressive Growth: The fund is classified as ‘Very High’ risk and invests predominantly in small cap stocks, making it more suitable for investors who can tolerate sharp fluctuations and are willing to take higher risks for potentially higher long-term capital appreciation.
Long-Term Investors: Small-cap stocks can be volatile over shorter periods, so the fund is better suited to investors who can remain invested through market cycles.
ULIP Investors Looking for a Small Cap Option: Policyholders whose Bajaj Life ULIP offers this fund and who want a predominantly small-cap allocation can consider it.

Who Should Not Consider It?

Conservative Investors: The ‘Very High’ risk classification makes this fund unsuitable for investors who prioritize capital stability.
Investors With a Short Investment Horizon: Those who may need the money soon may not be able to comfortably withstand small-cap market volatility.
Investors Looking for Guaranteed Returns: This is a market-linked fund, so returns are not guaranteed, and the policyholder bears the investment risk.
Investors Seeking a Standalone Investment: The fund is offered through ULIPs rather than as a standalone mutual fund. Investors who specifically want a direct mutual fund investment may find a small cap mutual fund more suitable.

Why Choose Ditto for Life Insurance?

At Ditto, we’ve assisted over 12,00,000 customers with choosing the right insurance policy. Why customers like Vijay below love us:

Vijay Tatipamula LinkedIn Customer Testimonial

No-Spam & No Salesmen
Rated 4.9/5 on Google Reviews by 30,000+ happy customers
Backed by Zerodha
Dedicated Claim Support Team
100% Free Consultation

You can book a FREE consultation. Slots are running out, so make sure you book a call now or chat with us on WhatsApp!

Conclusion

The key takeaway is that the Bajaj Life Small Cap Fund is a high-risk option designed for investors seeking long-term growth. Its past performance has been strong, but that does not guarantee similar returns in the future.

If you are comfortable with high volatility and already intend to invest through a ULIP, this fund can be worth considering. But if your goal is simply to build wealth, compare the ULIP with the term insurance plus mutual funds alternative before investing. This can help you assess whether the ULIP's additional costs, complexity, and restrictions are justified for your needs.

Disclosure: Bajaj Life is a Ditto partner insurer, but Ditto does not recommend or sell ULIPs. Ditto is not a SEBI-registered investment advisor and focuses exclusively on helping customers understand and purchase health insurance and term life insurance policies. This article is for educational purposes. Make any investment decision after consulting a qualified financial professional.

Frequently Asked Questions

Is the Bajaj Life Small Cap Fund a mutual fund or a ULIP fund?

It is a ULIP fund, not a standalone mutual fund. The fund is available only through eligible Bajaj Life ULIP products, such as Bajaj Goal Assure IV, where its value is linked to the underlying investment portfolio.

Where can I check the daily NAV of the Bajaj Life Small Cap Fund?

You can check the latest NAV on Bajaj Life's official fund information page. The NAV represents the value of one unit of the fund and changes based on the performance of its underlying investments.

Can I switch from the Bajaj Life Small Cap Fund to a debt fund without incurring a tax liability?

Switching between funds within the same ULIP does not result in an immediate tax event. However, the eventual tax treatment depends on the policy’s premiums and applicable tax rules at the time of withdrawal.

What is the lock-in period before I can withdraw from the Bajaj Life Small Cap Fund?

The fund is available through ULIPs, which have a five-year lock-in period. You may withdraw after the lock-in period, subject to the specific policy terms and applicable conditions governing partial withdrawals.

What fund management charge does Bajaj Life deduct from the Small Cap Fund?

The Bajaj Life Small Cap Fund has a 1.35% per annum fund management charge (FMC). This charge is deducted from the fund's NAV and should be considered when assessing the overall cost of investing through the ULIP.

How does the Bajaj Life Small Cap Fund compare with a regular small-cap mutual fund?

The Bajaj Life Small Cap Fund provides small-cap exposure within a ULIP, combining investment with life insurance. A regular small cap mutual fund is a standalone investment. Compare costs, flexibility, liquidity, taxation, and insurance requirements before choosing between them.

Is the Bajaj Life Small Cap Fund too risky for someone close to retirement?

It may not suit investors close to retirement who have limited time to recover from market downturns. The fund carries a ‘Very High’ risk classification and has significant exposure to small-cap stocks.

Does the Bajaj Life Small Cap Fund's 26.44% annualized return equal the return I will earn on my ULIP?

No. The 26.44% annualized return reflects the performance of the segregated Small Cap Fund. While the 1.35% fund management charge is reflected in the NAV, your actual ULIP returns may also be affected by mortality, policy administration, premium allocation, and other applicable policy charges.

Last updated on: 6 Sep, 2026