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Small Cap Mutual Funds

Small cap equity mutual funds invest in companies that rank below 250 in terms of market capitalisation. Since 2018, all stocks are indexed descending on market capitalisation. Small-cap funds have to invest at least 65% of their corpus in small cap stocks. View More

They invest in small revenue companies that have a market capitalisation of less than 5000 crore rupees. The funds are volatile in nature, but the small revenue companies they invest in have high growth prospects in the long term. You have to bear in mind that these companies are generally not diversified and they focus on a single line of business.

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Small Cap Mutual Funds List

Filters
logo Bandhan Small Cap Fund - Direct Growth

21.05%

Fund Size (Cr.) - 8,475

Invest
logo ITI Small Cap Fund - Direct Growth

13.51%

Fund Size (Cr.) - 2,011

Invest
logo Tata Small Cap Fund - Direct Growth

16.04%

Fund Size (Cr.) - 8,274

Invest
logo Nippon India Small Cap Fund - Direct Growth

7.90%

Fund Size (Cr.) - 50,826

Invest
logo Invesco India Smallcap Fund - Direct Growth

14.97%

Fund Size (Cr.) - 5,312

Invest
logo Quant Small Cap Fund - Direct Growth

2.42%

Fund Size (Cr.) - 22,832

Invest
logo Franklin India Smaller Companies Fund - Direct Growth

3.90%

Fund Size (Cr.) - 11,257

Invest
logo HDFC Small Cap Fund - Direct Growth

2.65%

Fund Size (Cr.) - 28,120

Invest
logo Edelweiss Small Cap Fund - Direct Growth

8.76%

Fund Size (Cr.) - 3,719

Invest
logo HSBC Small Cap Fund - Direct Growth

6.31%

Fund Size (Cr.) - 13,334

Invest
View More

Who Should Invest in Small Cap Mutual Funds?

Small caps can even double or triple in value over the long run in a bull market, so they are a great addition to your portfolio in spite of posing a significant amount of risk. Hence, these funds are perfect for investors who have an appetite for risk. These funds tend to outperform large cap funds in the long run provided you buy them early in a bull market. However, in a bear market, the mid and large cap funds outperform the small caps View More

It is best to invest in small caps for a period of 5-7 years because in a bear market small caps perform poorly. These funds are ideal for investors who have a long investment horizon. You should have some long term goals in mind while investing in small caps. You can plan for your retirement, your children’s education or buying a retirement home when investing in these funds for the long term
These funds work well for investors who want a diversified portfolio by holding small cap, mid cap and large cap funds. In a bull market these funds outperform large caps, while in a bear market investment in large caps can help improve the performance of the portfolio since small caps underperform in a bear market
If you are a patient investor, a small cap fund is perfect for you. Never panic and sell or buy in a hurry. You need to be patient to book profits when you buy a small cap fund. Don’t try to time the market

Popular Small Cap Mutual Funds

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 8,475
  • 3Y Return
  • 25.40%

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 2,011
  • 3Y Return
  • 24.01%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 8,274
  • 3Y Return
  • 22.13%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 50,826
  • 3Y Return
  • 21.43%

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 5,312
  • 3Y Return
  • 21.35%

  • Min SIP Investment Amt
  • ₹ ₹ 1000
  • AUM (Cr.)
  • ₹ 22,832
  • 3Y Return
  • 21.13%

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 11,257
  • 3Y Return
  • 20.20%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 28,120
  • 3Y Return
  • 18.55%

  • Min SIP Investment Amt
  • ₹ ₹ 100
  • AUM (Cr.)
  • ₹ 3,719
  • 3Y Return
  • 17.91%

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 13,334
  • 3Y Return
  • 17.33%

FAQs

If you are looking for higher returns in a shorter period, you should invest in small-cap funds. Small-cap funds usually invest in the stocks of smaller companies that respond severely to market dynamics. As a result, these funds are high-risk. In the shorter term, the volatility may cause you to sustain losses in small-cap; however, if the fund performs well, the returns are exponential.

Yes. Small-cap funds have low liquidity, making them unsuitable for investing in if you intend to improve your liquidity through investment. Additionally, small-cap funds are highly volatile and may cause you to sustain high losses if the market underperforms. It is best to carefully select the small-cap fund you wish to invest in and plan your investment in it.

You can begin investing in small cap funds online through websites like 5Paisa. These websites provide you with the right market analytics and information that helps you judge fund performance yourself and take a call for your investment. They also help with predictions that help you plan your investments better.

You can also invest in the stock of small-cap companies by creating a Demat account; however, this method is riskier.

Experts believe that while small-cap funds are high-risk investments, you can invest in a few good small-cap funds for the long term instead of the short term. Long-term small cap funds can potentially outperform large and mid-cap funds, enabling you to get better returns and absorb market risks that tend to be highly effective to small cap.

On a long-term horizon, small-cap funds can perform better than other caps and give you great returns. With that said, on a 10-year timeline, you can dedicate 10% to 20% of your portfolio to small-cap funds, keeping the losses under control should the market become bearish.

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