Top Performing Small Cap Funds in 10 Years

The below table shows a list Of the Top Performing Small Cap Funds in 10 Years Based on AUM, NAV, and minimum SIP.

Introduction to Top Performing Small Cap Funds in 10 Years

Nippon India Small Cap Fund  

Nippon India Small Cap Fund is a Small Cap mutual fund scheme from Nippon India Mutual Fund. This fund has been operational since December 31, 2012, with average annual returns of 49.03% since inception.

Nippon India Small Cap Fund falls under the Small Cap Fund category with an AUM of ₹60,372.55 crores, a 5-year CAGR of 40.48%, an exit load of 1%, and an expense ratio of 0.63%. The SEBI risk category is Very High. Its asset allocation includes 95.85% in Equity and 4.15% in Cash & Equivalents.

Quant Small Cap Fund  

Quant Small Cap Fund is a Small Cap mutual fund scheme from Quant Mutual Fund. This fund has been operational for 11 years and 8 months, having been launched on January 1, 2013.

Quant Small Cap Fund falls under the Small Cap Fund category with an AUM of ₹22,967.17 crores, a 5-year CAGR of 52.34%, an exit load of 1%, and an expense ratio of 0.64%. The SEBI risk category is Very High. Its asset allocation includes 84.05% in Equity, 14.74% in Cash & Equivalents, 0.97% in Treasury Bills, 0.24% in Futures & Options, and 0% in Mutual Funds.

Kotak Small Cap Fund  

Kotak Small Cap Fund is a Small Cap mutual fund scheme from Kotak Mahindra Mutual Fund. This fund has been operational for 11 years and 7 months, having been launched on January 1, 2013.

Kotak Small Cap Fund falls under the Small Cap Fund category with an AUM of ₹17,507.11 crores, a 5-year CAGR of 36.17%, an exit load of 1%, and an expense ratio of 0.49%. The SEBI risk category is Very High. Its asset allocation includes 96.24% in Equity and 3.76% in Cash & Equivalents.

DSP Small Cap Fund  

DSP Small Cap Fund is a Small Cap mutual fund scheme from DSP Mutual Fund. This fund has been operational for 11 years and 7 months, having been launched on January 1, 2013.

DSP Small Cap Fund falls under the Small Cap Fund category with an AUM of ₹16,084.62 crores, a 5-year CAGR of 34.52%, an exit load of 1%, and an expense ratio of 0.81%. The SEBI risk category is Very High. Its asset allocation includes 93.60% in Equity and 6.40% in Cash & Equivalents.

Canara Robeco Small Cap Fund  

Canara Robeco Small Cap Fund is a Small Cap mutual fund scheme from Canara Robeco Mutual Fund. This fund has been operational for 5 years and 7 months, having been launched on January 25, 2019.

Canara Robeco Small Cap Fund falls under the Small Cap Fund category with an AUM of ₹11,499.07 crores, a 5-year CAGR of 39.06%, an exit load of 1%, and an expense ratio of 0.42%. The SEBI risk category is Very High. Its asset allocation includes 96.29% in Equity, 3.63% in Cash & Equivalents, and 0.08% in Rights.

Tata Small Cap Fund  

Tata Small Cap Fund is a Small Cap mutual fund scheme from Tata Mutual Fund. This fund has been operational since November 12, 2018, with average annual returns of 53.13% since inception.

Tata Small Cap Fund falls under the Small Cap Fund category with an AUM of ₹8,448.91 crores, a 5-year CAGR of 37.26%, an exit load of 1%, and an expense ratio of 0.30%. The SEBI risk category is Very High. Its asset allocation includes 92.30% in Equity, 7.59% in Cash & Equivalents, and 0.11% in REITs & InvIT.

Invesco India Small Cap Fund  

Invesco India Small Cap Fund is a Small Cap mutual fund scheme from Invesco Mutual Fund. This fund has been operational for 5 years and 11 months, having been launched on October 10, 2018.

Invesco India Small Cap Fund falls under the Small Cap Fund category with an AUM of ₹4,580.54 crores, a 5-year CAGR of 36.63%, an exit load of 1%, and an expense ratio of 0.41%. The SEBI risk category is Very High. Its asset allocation includes 98.19% in Equity and 1.81% in Cash & Equivalents.

Edelweiss Small Cap Fund  

Edelweiss Small Cap Fund is a Small Cap mutual fund scheme from Edelweiss Mutual Fund. This fund has been operational since February 7, 2019, with average annual returns of 44.94% since inception.

Edelweiss Small Cap Fund falls under the Small Cap Fund category with an AUM of ₹3,986.11 crores, a 5-year CAGR of 37.48%, an exit load of 1%, and an expense ratio of 0.40%. The SEBI risk category is Very High. Its asset allocation includes 97.03% in Equity and 2.97% in Cash & Equivalents.

Union Small Cap Fund  

Union Small Cap Fund is a Small Cap mutual fund scheme from Union Mutual Fund. This fund has been operational for 10 years and 3 months, having been launched on May 20, 2014.

Union Small Cap Fund falls under the Small Cap Fund category with an AUM of ₹1,533.50 crores, a 5-year CAGR of 34.39%, an exit load of 1%, and an expense ratio of 0.86%. The SEBI risk category is Very High. Its asset allocation includes 96.24% in Equity, 3.69% in Cash & Equivalents, and 0.07% in Treasury Bills.

Bank of India Small Cap Fund  

Bank of India Small Cap Fund is a Small Cap mutual fund scheme from Bank of India Mutual Fund. This fund has been operational since December 19, 2018, with average annual returns of 54.40% since inception.

Bank of India Small Cap Fund falls under the Small Cap Fund category with an AUM of ₹1,236.83 crores, a 5-year CAGR of 42.05%, an exit load of 1%, and an expense ratio of 0.55%. The SEBI risk category is Very High. Its asset allocation includes 96.10% in Equity, 3.88% in Cash & Equivalents, and 0.01% in Treasury Bills.

What Are Small Cap Funds?

Small Cap Funds are mutual funds that primarily invest in stocks of smaller companies with lower market capitalizations. These funds target companies that are typically in the early stages of growth, offering high potential for returns but also carrying higher risk.

Small Cap Funds usually invest in companies ranking below the top 250 in terms of market capitalization. These companies often have innovative business models or operate in niche markets, providing opportunities for significant growth.

These funds can offer the potential for higher returns compared to large-cap or mid-cap funds, but they also come with increased volatility and risk. They are typically suitable for investors with a high-risk tolerance and a long-term investment horizon.

Features Of Top Performing Small Cap Funds in 10 Years

The main features of top-performing Small Cap Funds over 10 years include high growth potential, expert management, diversification across sectors, ability to identify emerging companies, and potential for significant outperformance in bull markets.

• High Growth Potential: These funds invest in smaller companies with the potential for rapid growth, often outpacing larger, more established firms in terms of returns.

• Expert Management: Top-performing Small Cap Funds are managed by skilled professionals who excel at identifying promising small companies with strong growth prospects.

• Sector Diversification: These funds often spread investments across various sectors, capitalizing on growth opportunities in different areas of the economy.

• Emerging Company Focus: Small Cap Funds are well-positioned to identify and invest in emerging companies before they become widely recognized, potentially leading to substantial returns.

• Market Outperformance: During bull markets, small-cap stocks often outperform their larger counterparts, potentially leading to significant gains for these funds.

Best Performing Small Cap Funds in 10 Years

The table below shows the Best Performing Small Cap Funds in 10 Years Based on the lowest to highest expense ratio.

Top Performing Small Cap Funds in 10 Years In India

The table below shows the top-performing small funds in 10 years in India based on the Highest 3Y CAGR.

Top Performing Small Cap Funds in 10 Years

The table below shows the Top Performing Small Cap Funds in 10 Years based on exit load, i.e., the fee that the AMC charges investors when they exit or redeem their fund units.

Factors To Consider When Investing In Top Performing Small Cap Funds in 10 Years

The main factors to consider when investing in top-performing Small Cap Funds over 10 years include historical performance, fund manager expertise, risk-adjusted returns, portfolio composition, liquidity, and alignment with your investment goals and risk tolerance.

• Historical Performance: Evaluate the fund’s long-term track record, comparing returns against relevant benchmarks and peer funds to assess consistency and outperformance over various market cycles.

• Fund Manager Expertise: Research the fund manager’s experience and success in identifying promising small-cap companies and navigating the unique challenges of the small-cap market.

• Risk-Adjusted Returns: Analyze risk-adjusted metrics like the Sharpe ratio and standard deviation to understand how well the fund balances high returns with the inherent volatility of small-cap stocks.

• Portfolio Composition: Examine the fund’s sector allocation, top holdings, and diversification strategy to ensure a balanced approach to small-cap investing.

• Liquidity Management: Consider how the fund manages liquidity, as small-cap stocks can be less liquid than their larger counterparts, potentially impacting buy and sell decisions.

How To Invest In Top Performing Small Cap Funds in 10 Years?

To invest in top-performing Small Cap Funds over 10 years, start by researching funds with consistent long-term performance. Consider factors like expense ratios, fund manager expertise, and risk-adjusted returns. Align the investment with your financial goals and high-risk tolerance.

Choose between lump sum investments or Systematic Investment Plans (SIPs) based on your financial situation. SIPs can be particularly beneficial for small-cap funds, allowing you to average out the impact of market volatility over time.

Open an account with Alice Blue. Complete the necessary documentation, including KYC requirements, and initiate your investment. Regularly review and rebalance your portfolio as needed, keeping in mind the higher volatility of small-cap funds.

Advantages Of Investing In Top Performing Small Cap Funds in 10 Years?

The main advantages of investing in top-performing Small Cap Funds over 10 years include high growth potential, opportunity to invest in emerging companies, potential for significant outperformance, diversification benefits, and exposure to innovative sectors.

• High Growth Potential: Small-cap companies often have more room for growth compared to larger firms, potentially offering higher returns over the long term.

• Emerging Company Exposure: These funds provide access to promising companies in their early stages before they become widely recognized and potentially more expensive.

• Outperformance Potential: Small-cap stocks can significantly outperform larger caps during bull markets, potentially leading to substantial gains.

• Diversification: Adding Small Cap Funds to a portfolio can enhance diversification, as these funds often have a low correlation with large-cap funds.

• Innovation Exposure: Small-cap companies are often at the forefront of innovation, providing investors exposure to cutting-edge technologies and business models.

Risks Of Investing In Top Performing Small Cap Funds in 10 Years?

The main risks of investing in top-performing Small Cap Funds over 10 years include higher volatility, liquidity issues, economic sensitivity, the potential for underperformance in certain market conditions, and company-specific risks.

• High Volatility: Small-cap stocks typically experience more significant price fluctuations than larger companies, leading to potential short-term losses and increased portfolio volatility.

• Liquidity Risk: Small-cap stocks may have lower trading volumes, making it challenging for fund managers to buy or sell large positions without affecting prices.

• Economic Sensitivity: Smaller companies are often more vulnerable to economic downturns, potentially impacting fund performance during recessions or market corrections.

• Underperformance Risk: Small-cap funds may underperform during certain market conditions, particularly during periods of economic uncertainty when investors favor larger, more stable companies.

• Company-Specific Risk: Small-cap companies may be more prone to business failures or setbacks, potentially leading to significant losses if a major holding underperforms.

Importance of Small Cap Funds

The main importance of Small Cap Funds lies in their potential for high growth, ability to provide exposure to emerging companies, diversification benefits, and opportunity to capitalize on market inefficiencies in the small-cap segment.

• Growth Potential: Small Cap Funds offer exposure to companies with high growth potential, often outpacing larger firms in terms of returns.

• Emerging Company Access: These funds allow investors to participate in the growth of promising companies before they become widely recognized.

• Diversification: Including Small Cap Funds in a portfolio can enhance overall diversification, potentially reducing risk and improving long-term returns.

• Market Inefficiency Exploitation: The small-cap market is often less efficiently priced, allowing skilled fund managers to identify undervalued opportunities.

• Innovation Exposure: Small-cap companies are often at the forefront of innovation, providing investors access to cutting-edge technologies and business models.

How Long to Stay Invested in Small Cap Funds?

Investors should generally stay invested in Small Cap Funds for at least 7-10 years to fully capitalize on their growth potential and ride out short-term market volatility. This long-term approach allows time for the underlying companies to grow and for the fund to navigate various market cycles.

A longer investment horizon is particularly important for small-cap funds due to their higher volatility. It provides time for the compounding effect to work in your favor and helps smooth out the impact of market fluctuations on your overall returns.

Tax Implications of Investing in Small Cap Funds

Investments in Small Cap Funds are subject to capital gains tax. For holdings less than one year, short-term capital gains are taxed at 15%. For holdings over one year, long-term capital gains up to ₹1 lakh per year are tax-free, while gains above this threshold are taxed at 10%.

Dividends received from Small Cap Funds are taxable in the hands of investors at their applicable income tax slab rates. It’s advisable to consult a tax professional for personalized advice based on your specific financial situation and the latest tax regulations.

Future of Small Cap Funds

The future of Small Cap Funds in India looks promising, driven by the country’s economic growth potential and the increasing maturity of its financial markets. These funds are well-positioned to capitalize on emerging sectors and innovative companies that have the potential for significant growth.

As India’s economy evolves, Small Cap Funds may continue to offer attractive long-term returns for risk-tolerant investors. However, investors should be prepared for higher volatility and potential periods of underperformance, emphasizing the importance of a long-term investment horizon.

Top Performing Small Cap Funds in 10 Years FAQs

Disclaimer: The above article is written for educational purposes, and the companies’ data mentioned in the article may change with respect to time The securities quoted are exemplary and are not recommendatory.