Want to Start an SIP? 36 Small-Cap Mutual Fund Schemes Deliver Up to 45% Returns in Six Months

Fueled by a massive wave of retail investments and a major milestone that pushed India's mutual fund AUM up by 12.2% to US$ 790.07 billion in FY26, small-cap funds have made a powerful comeback. Thanks to strong Q1 FY27 earnings growth topping 30%,excluding oil and gas,and a solid rebound following the market correction in March 2026. 

Interestingly, all of the 36 small-cap mutual funds posted impressive double-digit gains over a six-month window, averaging roughly 25.20%. 

Naturally, this strong rally has investors wondering whether they should keep their SIPs running or lock in some profits, which makes taking a closer look at the best performing funds more important than ever.

Top Small-Cap Mutual Funds Delivering Up to 45% Returns in Six Months

An analysis of India’s top and bottom small-cap mutual funds reveals a stark performance divergence across the category.Driven by strong momentum in small-cap equities, all small-cap mutual funds delivered double-digit positive returns over the last six months. 

Below are the top three funds with the highest 6-month returns: 

1) Bank Of India Small Cap 

Bank of India Small Cap Fund was incorporated on December 12, 2018, completing 8 years. The investment objective of the scheme is to generate long-term capital appreciation by investing predominantly in equity and equity-related securities of small-cap companies. The fund has a total ₹3,307.18 crore  AUM as on August 31st.

The fund has a minimum investment of ₹5,000 and is an open-ended mutual fund. It has delivered strong returns, with 6 months returns at 44.62%,1-year returns at 29.03%, 3-year returns at 19.98%, and 5-year returns at 18.36%, consistently outperforming its benchmark, the NIFTY Smallcap 250 TRI. The Fund has given around 20% more returns than its index Nifty Smallcap 250 in 6 months.

2) Grow Small Cap 

The Groww Small Cap Fund was launched on January 8, 2026, and now it has been operating for almost 10 months. The objective of this fund is to provide long-term gains through investments in equity and equity-linked securities of small-cap companies. The net assets under management of this scheme amount to ₹764 crore, while the net asset value (NAV) stands at ₹12.79, as of September 30.

With a minimum investment requirement of ₹500, the fund has shown excellent performance, providing returns of 39.02% in 6 months, and it has beaten its benchmark, NIFTY Smallcap 250 TRI by more than 14%.

3) JM Small Cap 

Established on 27th June, 2024, the JM Small Cap Fund is nearly two years old. The main aim of the fund scheme is to make money through capital gains and income by making investments primarily in small-cap companies. Till 31st August, the total AUM of the scheme stands at ₹929 crore, with the NAV value of the fund being ₹11.41 as of September 30, 2026.

With an initial investment of ₹1,000, this open-ended mutual fund scheme has had an impressive performance with returns of 38.8% in six months and 16.2% in one year, surpassing its benchmark index NIFTY Smallcap 250 TRI by over 13%.

Reason for Small-Cap Mutual Fund Outperformance 

Following a market correction in March 2026, the Nifty Smallcap 250 Index staged a swift recovery, rising by approximately 20.8% over the subsequent six months. This broad-based rally was primarily driven by strong underlying earnings growth, in Q1 FY27,alongside rising investor confidence and solid macroeconomic fundamentals.

Because small-cap mutual funds typically allocate upwards of 65% to 70% of their portfolios to small-cap stocks, all 36 schemes in the category generated impressive double-digit gains during this period, averaging roughly 25.20% through effective stock selection and strategic asset allocation.

Conclusion

The Indian stock market has faced its share of tough times in the past; however, what it has never failed to do is scale new heights. It is important for investors to note that investment through SIP is a long-term game, especially in cases of volatile markets like small-cap, where superior performers like Bank of India Small Cap (44.62% in 6 month return), Groww Small Cap (39.02%), and JM Small Cap (38.8%) have already surpassed the overall index. As market timing is a very tricky thing, the only aim of all investors must be to ensure regular SIP investment along with fund reallocation from time to time.