Small cap mutual funds invest in companies ranked 251st and below by market capitalisation. These are smaller, emerging companies with high growth potential but also higher risk. Small cap funds can deliver exceptional returns during bull markets but can also see significant declines during downturns, making them suitable for aggressive investors with a long-term horizon of 7+ years.
SEBI mandates that small cap funds invest at least 65% of their assets in small cap stocks. These funds offer the opportunity to invest in tomorrow’s market leaders at early stages. However, investors should limit small cap allocation to 15-25% of their overall equity portfolio.
| # | Fund Name | NAV (₹) | 1Y Return ▼ | 3Y CAGR | 5Y CAGR |
|---|---|---|---|---|---|
| 1 | TRUSTMF SMALL CAP FUND | 12.48 | +21.52% | — | — |
| 2 | Union Small Cap Fund - Direct Plan - Growth Option | 59.89 | +14.58% | +20.30% | +18.40% |
| 3 | BANK OF INDIA Small Cap Fund Direct Plan Growth | 58.29 | +13.44% | +23.43% | +21.22% |
| 4 | Motilal Oswal Small Cap Fund | 15.58 | +10.00% | — | — |
| 5 | Aditya Birla Sun Life Small Cap Fund - Growth | 104.63 | +8.18% | +18.11% | +14.73% |
| 6 | Sundaram Small Cap Fund Direct Plan - Growth | 307.51 | +7.93% | +19.87% | +18.41% |
| 7 | Mahindra Manulife Small Cap Fund | 21.27 | +7.53% | +23.51% | — |
| 8 | JM Small Cap Fund (Direct) - Growth Option | 10.90 | +7.12% | — | — |
| 9 | LIC MF Small Cap Fund | 35.80 | +6.95% | — | — |
| 10 | quant Small Cap Fund - Growth Option | 294.48 | +6.93% | +21.12% | +21.32% |
| 11 | DSP Small Cap Fund | 230.59 | +6.79% | +20.12% | +19.06% |
| 12 | ITI Small Cap Fund - Direct Plan - Growth Option | 33.86 | +6.69% | +25.69% | +17.66% |
| 13 | PGIM India Small Cap Fund - Direct Plan- Growth Option | 17.86 | +6.69% | +16.35% | — |
| 14 | Invesco India Smallcap Fund | 48.90 | +6.17% | +23.92% | +21.33% |
| 15 | BANDHAN SMALL CAP FUND | 52.80 | +5.31% | +29.59% | +22.19% |
| 16 | Mirae Asset Small Cap Fund | 11.67 | +4.61% | — | — |
| 17 | Edelweiss Small Cap Fund | 49.54 | +3.69% | +18.77% | +18.90% |
| 18 | Nippon India Small Cap Fund - Direct Plan Growth Plan - Growth Option | 195.04 | +3.40% | +19.13% | +20.95% |
| 19 | QUANTUM SMALL CAP FUND - DIRECT PLAN GROWTH OPTION | 13.27 | +3.35% | — | — |
| 20 | Baroda BNP Paribas Small Cap Fund - Direct Plan - Growth option | 13.67 | +2.86% | — | — |
Data sourced from AMFI & mfapi.in. Returns are annualised CAGR. Past performance doesn't guarantee future results. Last updated: 07 Jun 2026
Frequently Asked Questions
Are small cap funds risky?
Yes, small cap funds carry higher risk compared to large and mid cap funds due to the smaller size and lower liquidity of underlying companies. However, this higher risk comes with potential for higher returns over long periods.
What is the best time to invest in small cap funds?
There is no perfect timing for investing in small cap funds. A SIP approach helps you invest across market cycles, buying more units when prices are low and fewer when prices are high.
How much should I allocate to small cap funds?
Financial advisors typically recommend allocating 15-25% of your equity portfolio to small cap funds, depending on your risk tolerance and investment horizon.
Can small cap funds give multibagger returns?
Small cap funds have the potential for high returns as they invest in emerging companies. Some small cap funds have delivered 20%+ CAGR over 5-10 year periods, though such returns are not guaranteed.