Mutual funds have become an incredibly popular option for a wide variety of investors.

This is primarily due to the automatic diversification they offer, as well as the advantages of professional management, liquidity, and customizability.

Mutual Funds are a great investment option for people who wish to grow their money over a period of time.

Whether investors are looking for capital gains or seeking regular income, they can choose to invest in a wide range of mutual funds.

Among mutual funds, small and mid-cap mutual funds have given some of the highest returns among mutual funds.

Here are the top 10 small and mid-cap funds you can pick for investment in mutual funds. These are the best small and mid-cap fund to invest in 2018.

Top 5 Mid Cap Funds

Here, the mutual fund invests in stocks of mid-size companies.

Mid-caps are compact companies of the equity market, falling somewhere between small and large cap companies and are ranked 100-250 by market capitalization.

L&T Midcap Fund

This is a mid-cap equity oriented mutual fund launched on August 09, 2004.

It is a fund with high risk and has given a return of 25.73% since its launch.

Returns per annum over the years from this fund are:

Duration Returns
1 year  15.64%
3 years  19.29%
5 years  30.03%

Invest in L&T Midcap Fund Now

  • This fund has been rated as a 5-star fund by Groww.
  • AUM of close to ₹ 1323 Cr.
  • Age is nearly 13 years. So its performance can be easily judged.
  • Has consistently outperformed its benchmark Nifty Free Float Midcap 100 since its launch.
  • The top portfolio holdings of the fund include Mphasis Ltd., CBLO ( CCIL ), The Ramco Cements Ltd., Emami Ltd., Mindtree Ltd., Engineers India Ltd., Jindal Steel and Power Ltd., Sundaram Finance Ltd. etc.
  • The holdings are balanced across various sectors with maximum weight given to Financial Services ( 18.5 % ) followed by Construction ( 13.5 % ) and Industrial Manufacturing ( 12.5 % )

  • Minimum SIP = ₹ 500
  • Equity share = 86.6 % , Debt share = 0 % and Cash = 13.4 %

  • Large Cap share= 14.8 % , Mid Cap share = 79.2 % and Small Cap share = 6 %

Aditya Birla Sun Life Small & Midcap Fund

This is a Mid Cap Equity Oriented Mutual Fund launched on May 31, 2007. It is a fund with high risk and has given a return of 24.08 % since its launch.

Returns per annum over the years from this fund are:

Duration Returns
1 year  14.05%
3 years  20.16 %
5 years  27.87 %

Invest in Aditya Birla Sun Life Small & Midcap Fund Now

  • This fund has been rated as a 5-star fund by Groww.
  • AUM of close to ₹ 1866 Cr.
  • Age is nearly 10 years. So its performance can be easily judged.
  • Has consistently outperformed its benchmark Nifty Free Float Midcap 100 since its launch.
  • The top portfolio holdings of the fund include Cyient Ltd., CBLO ( CCIL ), Chennai Petroleum Corporation Ltd.etc., DCB Bank Ltd., Gujarat State Petronet Ltd., KEC International Ltd., PNC Infratech Ltd. etc.
  • The holdings are balanced across various sectors with maximum weight given to Financial Services ( 20.1 % ) followed by Construction ( 13 % ) and Consumer Goods ( 12.1 % )

  • Minimum SIP = ₹ 1000
  • Equity share = 84.9 % , Debt share = 0 % and Cash = 15.1%

  • Large Cap share= 0 % , Mid Cap share = 70.8 % and Small Cap share = 29.2 %

Mirae Asset Emerging Bluechip Fund

This is a  Mid Cap Equity Oriented Mutual Fund launched in July 9, 2010. It is a fund with moderately high risk and has given a return of 27.02% since its launch.

Returns per annum over the years from this fund are:

Duration Returns
1 year  11.70%
3 years  19.47%
5 years  30.91%

Invest in Mirae Asset Emerging Bluechip Fund Now

  • This fund has been rated as a 5-star fund by Groww.
  • AUM of close to ₹ 5364 cr.
  • Age is nearly 7 years.
  • Has consistently outperformed its benchmark Nifty Free Float Midcap 100 since its launch.
  • The top portfolio holdings of the fund include Tata Global Beverages Ltd., ICICI Bank Ltd., Kotak Mahindra Bank Ltd., Raymond Ltd., HDFC Bank Ltd., Federal Bank Ltd., Info Edge Ltd., IndusInd Bank Ltd., Ceat Ltd. etc.
  • The holdings are balanced across various sectors with maximum weightage given to Financial Services (25.9%) followed by Consumer Goods (12.8%).

  • Minimum SIP = ₹ 1000
  • Equity share = 98.8%, Debt share = 0.1% and Cash = 1.1%.

  • Large Cap share = 36.8% , Mid Cap share = 57.6% and Small Cap share = 5.6%.

Canara Robeco Emerging Equities

This is a Mid Cap Equity Oriented Mutual Fund launched in March 11, 2005. It is a fund with high risk and have given a return of 26.42 % since its launch.

Returns per annum over the years from this fund are : 

Duration Returns
1 year  15.83 %
3 years  18.46 %
5 years  31.55 %

Invest in Canara Robeco Emerging Equities Fund Now

  • This fund has been rated as a 4 star fund by Groww.
  • AUM of close to ₹ 3208 Cr.
  • Age is nearly 12 years. So its performance can be easily judged.
  • Has consistently outperformed its benchmark Nifty Free Float Midcap 100 since its launch.
  • The top portfolio holdings of the fund include CBLO ( CCIL ), Reliance Industries Ltd., Bajaj Finserv Ltd., Minda Industries Ltd., Container Corporation Of India Ltd., Piramal Enterprises Ltd., ITC, Atul Ltd. etc.
  • The holdings are balanced across various sectors with maximum weightage given to Consumer Goods ( 14.5 % ) followed by Financial Services ( 13.8 % ) and Automobile ( 11.9 % )

  • Minimum SIP = ₹ 1000
  • Equity share = 96.4 % , Debt share = 0 % and Cash = 3.6 %

  • Large Cap share = 46.1 % , Mid Cap share = 47.2 % and Small Cap share = 6.7%.

Aditya Birla Sun Life Pure Value Fund

This is a Mid Cap Equity Oriented Mutual Fund launched in March 27, 2008. It is a fund with high risk and have given a return of 8.81 % since its launch.

Returns per annum over the years from this fund are:

Duration Returns
1 year  17.19 %
3 years  18.89 %
5 years  29.35 %

Invest in Aditya Birla Sun Life Pure Value Fund Now

  • This fund has been rated as a 4 star fund by Groww.
  • AUM of close to ₹ 1456 Cr.
  • Age is nearly 9 years. So its performance can be easily judged.
  • Has consistently outperformed its benchmark S&P BSE 200 since its launch.
  • The top portfolio holdings of the fund include Hindustan Petroleum Corporation Ltd., Gujarat Alkalies & Chemicals Ltd., Tata Global Beverages Ltd., Tata Chemicals Ltd., CBLO ( CCIL ), Steel Authority of India Ltd. etc.
  • The holdings are balanced across various sectors with maximum weightage given to Energy ( 19.1 % ) followed by Chemical ( 15.2 % ) and Consumer Goods ( 11.1 % )

  • Minimum SIP = ₹ 1000
  • Equity share = 95.3 % , Debt share = 0.5 % and Cash = 4.2 %

  • Large Cap share= 27.1 % , Mid Cap share = 60.7 % and Small Cap share = 12.2 %

Top 5 Small Cap Funds

In these types of funds, the fund manager invests a major portion of the investors’ money in stocks of small-cap companies. Small-cap stands for small companies of the stock market and are all the companies apart from large and mid-cap companies in a market.

HDFC Small Cap Fund

This is a Small Cap Equity Oriented Mutual Fund launched in April 03, 2008. It is a fund with high risk and have given a return of 22.74 % since its launch.

Returns per annum over the years from this fund are:

Duration Returns
6 months  5.88 %
1 year  30.24 %
3 years  23.07 %

Invest in HDFC Small Cap Fund Now

  • This fund has been rated as a 5-star fund by Groww.
  • AUM of close to ₹ 2152 Cr.
  • Age is nearly 10 years. So its performance can be easily judged.
  • Has consistently outperformed its benchmark Nifty Free Float Small cap 100 since its launch.
  • The top portfolio holdings of the fund include Sonata Software Ltd., CBLO ( CCIL ), Redington India Ltd., Aarti Industries Ltd., KEC International Ltd., Dilip Buildcon Ltd., Balkrishna Industries Ltd. etc.
  • The holdings are balanced across various sectors with maximum weight given to Industrial Manufacturing ( 16.8 % ) followed by Automobile ( 16.5 % ) and Construction ( 11.5 % )

  • Minimum SIP = ₹ 500
  • Equity share = 85.9 % , Debt share = 0 % and Cash = 14.1%.

  • Large Cap share = 0.8 % , Mid Cap share = 62.4 % and Small Cap share = 36.8%

L&T Emerging Businesses Fund

This is a Small Cap Equity Oriented Mutual Fund launched on May 12, 2014. It is a fund with high risk and have given a return of 28.10 % since its launch.

Returns per annum over the years from this fund are:

Duration Returns
6 months  0.11 %
1 years  21.33 %
3 years  25.08

Invest in L&T Emerging Businesses Fund Now

  • This fund has been rated as a 5 star fund by Groww.
  • AUM of close to ₹ 4286 Cr.
  • Age is nearly 3 years. So its performance can be difficult to judge on a longer run. Though its a relatively new fund, it has made its mark with high return on investment.
  • Has consistently outperformed its benchmark S&P BSE Small Cap since its launch.
  • The top portfolio holdings of the fund include Sobha Ltd., CBLO ( CCIL ), Rane Holdings Ltd., Aarti Industries Ltd., Future Supply Chain Solutions Ltd., Dilip Buildcon Ltd., IPCA Laboratories Ltd., Nocil Ltd. etc.
  • The holdings are balanced across various sectors with maximum weight given to Industrial Manufacturing ( 21.9 % ) followed by Financial Services ( 14.9 % ) and Consumer Goods ( 10 % )

  • Minimum SIP = ₹ 500
  • Equity share = 86.9 % , Debt share =2 % and Cash = 11.1%

  • Large Cap share = 0 % , Mid Cap share = 67.7 % and Small Cap share = 32.3 %

This fund has exponential growth potential and has given high returns on investment. It is best suited for investors with a high-risk appetite or for seasoned investors. This is a new fund and has performed really well, giving more than expected return in last 3 years.

Also, this best for investors who have very good ideas of mutual funds and the risks associated with them. Associated with this fund for some good numbers of years for getting the benefit of its high return on investment.

Reliance Small Cap Fund

This is a Small Cap Equity Oriented Mutual Fund launched on September 16, 2010. It is a fund with high risk and has given a return of 30.51 % since its launch.

Returns per annum over the years from this fund are :

Duration Returns
1 year  23.77 %
3 years  23.86%
5 years  37.11 %

Here’s the key features of Reliance Small Cap Fund :

  • This fund has been rated as a 5-star fund by Groww.
  • AUM of close to ₹ 6371 Cr.
  • Age is nearly 7 years. So its performance can be easily judged.
  • Has consistently outperformed its benchmark S&P BSE Small Cap since its launch.
  • The top portfolio holdings of the fund include Navin Fluorine International Ltd., Deepak Nitrite Ltd., Aditya Birla Finance Ltd. ( 91D ), V I P Industries Ltd., RBL Bank Ltd., Cyient Ltd., CBLO ( CCIL ) etc.
  • The holdings are balanced across various sectors with maximum weightage given to Consumer Goods ( 21.7 % ) followed by Industrial Manufacturing ( 15.1 % )

  • Minimum SIP = ₹ 100
  • Equity share = 93 % , Debt share = 0 % and Cash = 7 %

  • Large Cap share = 5.4 % , Mid Cap share = 46.4 % and Small Cap share = 48%

This funds have exponential growth potential and give high returns on investment and is best suited for investors with high risk appetite or for seasoned investors.

Also, this best for investors who have very good ideas of mutual funds and the risks associates with them. Associated with this fund for some good numbers of years for getting benefit of its high return on investment.

Sundaram Small Cap Fund

This is a Small Cap Equity Oriented Mutual Fund launched in February 15, 2005. It is a fund with high risk and has given a return of 22.17% since its launch.

Returns per annum over the years from this fund are:

Duration Returns
1 year  9.40%
3 years  13.74%
5 years  28.57%

Invest in Sundaram Small Cap Fund Now

  • This fund has been rated as a 4 star fund by Groww.
  • AUM of close to ₹1481 Cr.
  • Age is nearly 7 years. So its performance can be easily judged.
  • Has consistently outperformed its benchmark S&P BSE Small Cap since its launch.
  • The top portfolio holdings of the fund include Navin Fluorine International Ltd.,Rane Holdings Ltd., J K Cement Ltd., V-Guard Industries Ltd., Heritage Foods Ltd., ITD Cementation India Ltd., NRB Bearings Ltd. etc.
  • The holdings are balanced across various sectors with maximum weightage given to Industrial Manufacturing ( 19.3 % ) followed by Construction ( 13 % ) and Financial Services ( 12.8 % ).

  • Minimum SIP = ₹1000
  • Equity share = 98.7% , Debt share = 0% and Cash = 1.3%.

  • Large Cap share= 0% , Mid Cap share = 60.3% and Small Cap share = 39.7%.

SBI Small Cap Fund

This is a Small Cap Equity Oriented Mutual Fund launched in September 09, 2009. It is a fund with high risk and have given a return of 32.72% since its launch.

Returns per annum over the years from this fund are:

Duration Returns
6 Months -3.10
1 year  33.98 %
3 years 24.53 %

Invest in SBI Small Cap Fund Now

  • This fund has been rated as a 4 star fund by Groww.
  • AUM of close to ₹ 943 Cr.
  • Age is nearly 8 years. So its performance can be easily judged.
  • Has consistently outperformed its benchmark S&P BSE Small Cap since its launch.
  • The top portfolio holdings of the fund include Westlife Development Ltd., Kirloskar Oil Engines Ltd., LT Foods Ltd., Relaxo Footwear, Elgi Equipments Ltd., Tamil Nadu Newsprint & Papers Ltd., Hawkins Cooker Ltd. etc.
  • The holdings are balanced across various sectors with maximum weightage given to Consumer Goods ( 23.7 % ) followed by Industrial Manufacturing ( 17.8 % ) and Services ( 14 % ).

  • Minimum SIP = ₹ 1000
  • Equity share = 95.4 % , Debt share = 0.5 % and Cash = 4.1 %

  • Large Cap share= 0 % , Mid Cap share = 43.3 % and Small Cap share = 56.7 %

Things to Remember

Don’t just run for returns from investment for investing in mutual funds. There are a lot of factors you should look into before selecting a fund which will match your investment goals.

Following the 3 things you should always remember before investing in Mutual Funds :

  • Higher rates: don’t blindly invest in the fund with the highest returns. Invest based on the duration you want to invest for.
  • Every person’s financial condition is different. Evaluate the funds you invest in yourself – don’t invest in a fund because of its popularity.
  • Review your investment from time to time but not too often. Once a few weeks is good enough.

Read More: 10 Tips on investing in Mutual Funds

To ensure that the fund is in good hands, choose a fund house having fund manager with a good amount of experience managing small/mid cap funds and associated with these funds for some good numbers of years.

To look at some of the best performing funds from every category of mutual funds, check out Groww 30 best mutual funds to invest in 2018.

Happy Investing!

Disclaimer: the views expressed here are those of the author and do not reflect those of Groww.