📊 Category Deep Dive · Small Cap Funds

Top 5 Small Cap Mutual Funds in India

An unbiased, data-driven comparison of India's best small cap mutual funds. Live NAV, returns, risk ratios, drawdowns and deep analysis — all in one place. For education only.

5Funds Compared
₹2.2L Cr+Combined AUM
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Live Comparison

Top 5 Small Cap Funds — At a Glance

Click any fund card to open the full deep-dive analysis page with charts, drawdowns, rolling returns, dark chapters and more.

1
SBI Small Cap Fund
SBI Mutual Fund · Direct Growth · Since 2009
NAV
1Y Return
—
3Y CAGR
—
AUM
₹29,000 Cr
Risk
Very High
Deep Analysis →
2
Nippon India Small Cap Fund
Nippon India Mutual Fund · Direct Growth · Since 2013
NAV
1Y Return
—
3Y CAGR
—
AUM
₹65,800 Cr
Risk
Very High
Deep Analysis →
3
Axis Small Cap Fund
Axis Mutual Fund · Direct Growth · Since 2013
NAV
1Y Return
—
3Y CAGR
—
AUM
₹22,000 Cr
Risk
Very High
Deep Analysis →
4
Kotak Small Cap Fund
Kotak Mutual Fund · Direct Growth · Since 2005
NAV
1Y Return
—
3Y CAGR
—
AUM
₹18,000 Cr
Risk
Very High
Deep Analysis →
5
HDFC Small Cap Fund
HDFC Mutual Fund · Direct Growth · Since 2008
NAV
1Y Return
—
3Y CAGR
—
AUM
₹31,000 Cr
Risk
Very High
Deep Analysis →
Visual Comparison

₹1 Lakh Invested — 5 Year Growth

How ₹1,00,000 invested 5 years ago would have grown in each fund (based on NAV data)

Fund Growth Comparison — 5 Years
Side by Side

Detailed Comparison Table

All key parameters in one table. Green = best in category.

Fund Launch AUM Expense Ratio Min SIP 1Y Return 3Y CAGR 5Y CAGR Exit Load
SBI Small Cap Sep 2009 ₹29,000 Cr 0.64% ₹500 — — — 1% < 1yr
Nippon India Small Cap Jan 2013 ₹65,800 Cr 0.66% ₹100 — — — 1% < 1yr
Axis Small Cap Nov 2013 ₹22,000 Cr 0.52% ₹100 — — — 1% < 1yr
Kotak Small Cap Feb 2005 ₹18,000 Cr 0.48% ₹100 — — — 1% < 1yr
HDFC Small Cap Apr 2008 ₹31,000 Cr 0.67% ₹100 — — — 1% < 1yr
Education

What Are Small Cap Funds?

Everything you need to know before investing in small cap mutual funds in India.

📌 SEBI Definition

As per SEBI, small cap companies are ranked 251st and beyond by full market capitalisation. Small cap mutual funds must invest at least 65% of their assets in such companies at all times.


These are typically growing businesses with high potential but also higher risk compared to large or mid cap companies.

⚡ Why Small Caps Can Outperform

  • Faster earnings growth than large caps
  • Under-researched — hidden gems available
  • Compounding works more powerfully at smaller base
  • Long runway for business expansion
  • India's economic growth benefits smaller companies most

⚠️ Key Risks to Know

  • Can fall 40-60% in market corrections
  • Illiquid — hard to sell during crashes
  • Higher business risk — smaller companies fail more
  • Needs 7+ year time horizon to ride out cycles
  • Not suitable as only fund in portfolio

✅ Who Should Invest

  • Investors with 7-10 year minimum horizon
  • Those who won't panic sell during crashes
  • Already have large/mid cap core portfolio
  • SIP investors doing regular monthly investments
  • High risk tolerance and long-term wealth goal
⚠️ Disclaimer: RightAdvise.com is NOT registered with SEBI or AMFI. All content is strictly for educational purposes only and does not constitute investment advice. Please consult a SEBI-registered investment advisor before investing.
Quick Answers

Frequently Asked Questions

Common questions about small cap mutual funds in India.

There is no single "best" fund. It depends on your investment horizon, risk appetite and existing portfolio. Nippon India Small Cap has the largest AUM and longest consistent track record. SBI Small Cap is known for quality stock selection. We recommend studying each fund's rolling returns and drawdown history before deciding.
As a general guideline, small cap allocation should not exceed 10-20% of your total equity portfolio. The rest should be in large cap and mid cap funds. Small caps are best used as a satellite allocation, not a core holding.
Yes, SIP is strongly preferred for small cap funds. Due to their high volatility, SIP averages out your purchase cost over time (rupee cost averaging). Lump sum investments in small caps carry significant timing risk — if you invest at a peak and the market falls 40%, recovery can take years.
As per Finance Act 2024: If you sell within 1 year — Short Term Capital Gains (STCG) tax of 20%. If you sell after 1 year — Long Term Capital Gains (LTCG) tax of 12.5% on gains above ₹1.25 lakh per year. LTCG up to ₹1.25 lakh per year is completely tax-free.
Direct plans are always better if you are investing on your own without a distributor. They have lower expense ratios (0.5-1% lower), which compounds to a significant difference over 10+ years. For example, 0.5% lower expense ratio on a 20-year investment can mean 10-15% more final corpus.
Minimum 7 years, ideally 10+ years. Small cap funds go through long painful periods — the 2018-2020 bear market lasted nearly 2 years with 40%+ drawdowns. Only investors who stayed through that cycle earned the subsequent 100%+ recovery returns.