In this article, we discuss some of the best performing small cap funds. Small Cap Funds have generated a lot of wealth in long term. Small-cap funds, as the name suggests, invest in small-cap companies. Because small cap companies are yet to grow big – investors can ride on their growth path.
In this article
Small Cap Funds are Best for Long-term
First things first, Small-cap funds invest in small cap companies – and hence are very risky. That means you can lose a significant part of your capital if the market falls down. Check out how DSP Micro Cap Fund, and in general Small Cap index fell during the 2008 crash.
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That is fall of more than 60% in a year.
But had you not sold your investments after the crash, this is what you would have seen.
That is a rise of more than 550% – you would have gained in your investments manifold!
So before moving ahead: Invest in small-cap if and only if you are okay with short-term volatility and only if you are investing for a long term. Long-term is usually more than 5 years.
Now let us look at the best performing small cap funds.
Top 5 Small-Cap Mutual Funds
This is a 5 star rated fund on Groww and is a little more than 10 years old. It returned 35.38% in the last 1 year and 25.28% in the last 5 years.
This fund is a very popular small cap fund by SBI. It is also a 5 star rated fund on Groww. In the last 1 year, it gave a return of 35.38% and in the last 5 years, 25.28%.
Reliance Small Cap Fund is also rated 5 stars on Groww and is one of the best performing small cap funds. In the last 1 year, it returned a whopping 53.21% and in the last 5 years, it gave 32.99%.
This fund is relatively new as it is less than 5 years old. On Groww, it is a 5 star rated fund and in the last 1 year, its returns stood at an incredible 56.17%.
Canara Robeco Emerging Equities Fund has given a return of 44.48% in the last 1 year and 28.83% in the last 5 years.
Investing in small-cap funds is only for those who are in it for the long-term (more than 5 years) and those who can stomach volatility in the short term.