Small-Cap Mutual Funds Show Nearly 8-Percentage-Point Gap in 10-Year SIP Returns

Key Takeaways

• Quant Small Cap Fund recorded a 10-year annualised SIP XIRR of 24.98%, the highest among 13 small-cap funds examined.
• Nippon India Small Cap Fund, the largest scheme by AUM in the comparison, delivered a 21.13% annualised SIP return.
• The five largest schemes showed a 7.99-percentage-point difference between their highest and lowest 10-year SIP returns.

Ten-Year SIP Returns Vary Across Small-Cap Schemes

Small-cap mutual funds have delivered widely differing returns for long-term systematic investment plan investors, according to a comparative performance study published on 8 November 2026.

Quant Small Cap Fund recorded the highest 10-year annualised SIP return among 13 schemes analysed, generating an XIRR of 24.98%.

The findings, based on Value Research data, also indicate that asset size and investment performance did not follow a consistent ranking.

Some schemes with relatively smaller assets generated higher historical SIP returns than significantly larger funds.

Comparison of the Five Largest Small-Cap Schemes

The five largest schemes by assets under management showed considerable differences in their reported SIP performance.

Source: Value Research data reported on 8 November 2026. Figures relate to direct plans.

Quant Small Cap Fund's 24.98% SIP XIRR was 7.99 percentage points higher than HDFC Small Cap Fund's 16.99%.

Nippon India Small Cap Fund, which managed the largest asset base in the group at ₹80,906 crore, generated a 21.13% return.

SBI Small Cap Fund and HDFC Small Cap Fund, each managing more than ₹40,000 crore, delivered annualised SIP returns below 18%.

Smaller Schemes Also Deliver Competitive Returns

Beyond the five largest funds, Union Small Cap Fund recorded an annualised SIP XIRR of 19.82%, with an AUM of ₹2,732 crore.

DSP Small Cap Fund delivered 19.42%, while HSBC Small Cap Fund generated 18.90%.

Other schemes in the comparison included Kotak Small Cap Fund at 17.97%, Sundaram Small Cap Fund at 17.64% and ICICI Prudential Small Cap Fund at 17.46%.

Franklin India Small Cap Fund and Aditya Birla Sun Life Small Cap Fund recorded annualised SIP returns of 16.54% and 15.56%, respectively.

Overall, six of the 13 small-cap schemes analysed generated annualised SIP XIRRs exceeding 18%.

Understanding the Return Metric

The returns in this study are calculated using the extended internal rate of return, or XIRR, methodology.

XIRR accounts for the timing and value of investments made through a systematic investment plan.

It differs from a lump-sum compound annual growth rate because SIP investments occur across multiple dates rather than through a single initial contribution.

The reported figures therefore represent the historical performance of regular investments over the 10-year period covered by the analysis.

Asset Size and Performance Are Distinct Measures

Assets under management measure the total value of investments managed by a scheme.

A larger asset base does not automatically translate into a higher investment return.

Historical performance depends on portfolio composition, investment decisions, market conditions, expenses and the timing of investments.

The November 2026 comparison demonstrates the range of outcomes within the small-cap category over a common long-term investment period, without establishing which funds may outperform in the future.