Small cap mutual funds invest in small cap companies (the ones that have a market capitalization of less than Rs. 5,000 crores). They are the funds that predominantly invest in small cap stocks, with a very minute portion invested in higher market categories. However, they tend to outperform large or mid-cap funds but are known to be much more riskier in comparison.
To understand small cap mutual funds better, you can have a look at some of the best small cap mutual funds to invest in 2025.
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| Fund Name | Category | Risk | NAV | Expense Ratio | 1Y Returns | 3Y Returns | 5Y Returns | Rating | Fund Size (in Cr) | Exit Load |
|---|---|---|---|---|---|---|---|---|---|---|
Bandhan Small Cap Fund | Equity | Very High | 51.81 | 0.41 | 0.1% | 32.0% | 32.7% | 5 | ₹15,737 | Exit load of 1%, if redeemed within 1 year. |
Invesco India Smallcap Fund | Equity | Very High | 47.63 | 0.4 | 1.2% | 27.5% | 32.9% | 5 | ₹8,055 | Exit load for units in excess of 10% of the investment, 1% will be charged for redemption within 1 year. See more |
Quant Small Cap Fund | Equity | Very High | 284.74 | 0.71 | -4.1% | 25.7% | 35.6% | 4 | ₹29,287 | Exit load of 1% if redeemed within 1 year |
HDFC Small Cap Fund | Equity | Very High | 162.33 | 0.68 | 2.0% | 23.9% | 31.5% | 4 | ₹36,827 | Exit load of 1% if redeemed within 1 year |
Nippon India Small Cap Fund | Equity | Very High | 190.81 | 0.63 | -5.3% | 23.8% | 33.8% | 4 | ₹66,136 | Exit load of 1% if redeemed within 1 year. |
Franklin India Small Cap Fund | Equity | Very High | 192.66 | 0.9 | -6.5% | 23.1% | 30.2% | 4 | ₹13,265 | Exit load of 1% if redeemed within 1 year. |
Edelweiss Small Cap Fund | Equity | Very High | 48.98 | 0.43 | -2.8% | 22.0% | 30.7% | 4 | ₹5,057 | Exit load of 1%, if redeemed within 90 days. |
Tata Small Cap Fund | Equity | Very High | 44.21 | 0.33 | -9.8% | 21.2% | 31.5% | 4 | ₹11,637 | Exit load of 0.50%, if redeemed within 30 days. |
ITI Small Cap Fund | Equity | Very High | 32.10 | 0.22 | -0.3% | 28.4% | 27.1% | 3 | ₹2,666 | Exit load of 0.50%, if redeemed within 3 months. |
Aditya Birla Sun Life Nifty Smallcap 50 Index Fund | Equity | Very High | 21.44 | 0.46 | -4.3% | 26.1% | NA | 3 | ₹247 | Exit load of 0.25%, if redeemed within 15 days. |
Axis Nifty Smallcap 50 Index Fund | Equity | Very High | 18.62 | 0.27 | -4.5% | 26.1% | NA | 3 | ₹535 | - |
Sundaram Small Cap Fund | Equity | Very High | 292.83 | 0.85 | -0.9% | 22.0% | 29.2% | 3 | ₹3,340 | For units more than 25% of the investments, an exit load of 1% if redeemed within 365 days. See more |
Bank of India Small Cap Fund | Equity | Very High | 52.03 | 0.74 | -5.7% | 21.4% | 29.9% | 3 | ₹1,925 | Exit load of 1% if redeemed within 1 year for units beyond 10% of the investment. See more |
HSBC Small Cap Fund | Equity | Very High | 90.20 | 0.64 | -8.9% | 20.9% | 31.2% | 3 | ₹16,040 | Exit load for units in excess of 10% of the investment,1% will be charged for redemption within 1 year. See more |
Axis Small Cap Fund | Equity | Very High | 123.54 | 0.56 | -0.3% | 20.0% | 27.4% | 3 | ₹25,975 | Exit load of 1% for investments beyond 10% if redeemed within 12 months See more |
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While searching for the best small cap mutual funds 2025, consider if you are-
It is suitable for investors who are already in the investing market and looking for more ways to diversify their investments. Given that small cap funds can be risky in nature, it ensures that your investments are spread across various other forms of investments and not small cap funds alone.
These investments are much more riskier than mid or large-cap funds, given that they invest in smaller company stocks that are yet to experience growth. Therefore, it can suit the investors who are willing to take the risk or have the risk appetite to face sudden lows of the fund.
Small cap funds can see sudden fluctuations in the short term, but they are known to perform well over the long term. This enables them to be the most suitable investors who can stay invested in the funds for the long term.
If you are investing lumpsum in mutual funds and looking forward to estimating your returns, simply use lumpsum calculator. It is a convenient tool that can assist you in generating your prospective returns.
The factors to consider before beginning to invest in top small cap funds are:
Risk Factor: Small cap mutual funds are highly volatile in nature when compared to mid or large cap mutual funds. Moreover, the net asset value of small cap mutual funds fluctuates on a broad range.
Investor Expertise: Small cap mutual funds can deliver high performance on a combination of good strategy and observation. But, these funds are known to be highly volatile. Therefore, it is advisable to investors with good mutual fund investment expertise.
Investment Term: These types of mutual funds are most suitable for investors with a long investment time horizon. It is mostly not suitable for investors with a short investment tenure.
Here are some of the benefits of investing in the best small-cap mutual funds:
Investment route: Investors can allocate their savings to small-cap funds via two ways: lump sum and Systematic Investment Plan (SIP). By opting for the first option, individuals can invest the total amount they want to invest in at one go. Nevertheless, please note that one may have to invest a minimum of Rs.1,000 in this case. On the contrary, SIP allows investors to allocate their funds to a mutual fund scheme at fixed intervals (monthly, quarterly, etc.). The instalment amount can be as low as Rs.100 in this regard.
While finding the best small cap funds, have a look at the major risks associated-
High Volatility: One of the biggest risks connected with small cap funds is that their prices might fluctuate dramatically. This makes them extremely unstable to invest in because the losses can be substantial if the price does not move in accordance with your expectations.
Risky Performance: The performance of small cap funds is determined by a number of factors, including stock selection, stock performance, and timely intervention by the fund manager to balance the fund. Since there are so many variables at play, the performance of small cap funds may not be as impressive as one might think.
Low Liquidity: Small cap mutual funds are rarely invested in by institutional investors. Even among retail investors, though, engagement is typically low. This can cause liquidity concerns and make it more difficult to buy or sell units in the market.
Small cap funds are known to have sudden highs, and provide rewarding returns. But, they are also known to be extremely volatile in nature, especially when compared to mid cap and large cap funds. Therefore, investors with more expertise can consider investing in these funds.
Small Cap Funds deliver stable returns in the long run because, in the short span of duration, they may encounter market fluctuation, resulting in volatile results.
It is risky and volatile to invest in small cap funds in the short term, it is when they could encounter major fluctuations. Apart from that, small cap funds can give you rewarding returns in the long run.
Small cap funds are known to give you high returns in the long term, and perform well over a time period.
Small cap funds can be the most suitable for investors with expertise in mutual fund investments.
Disclaimer: Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
Now let us jump and check about these top 15 mutual fund schemes.
Fund Performance: The Bandhan Small Cap Fund has given 32.03% annualized returns in the past three years and 32.72% in the last 5 years. The Bandhan Small Cap Fund comes under the Equity category of IDFC Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Bandhan Small Cap Fund via lump sum is ₹1,000 and via SIP is ₹100.
| Min Investment Amt | ₹1,000 |
|---|---|
| AUM | ₹15,737Cr |
| 1Y Returns | 0.1% |
Fund Performance: The Invesco India Smallcap Fund has given 27.51% annualized returns in the past three years and 32.88% in the last 5 years. The Invesco India Smallcap Fund comes under the Equity category of Invesco Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Invesco India Smallcap Fund via lump sum is ₹1,000 and via SIP is ₹500.
| Min Investment Amt | ₹1,000 |
|---|---|
| AUM | ₹8,055Cr |
| 1Y Returns | 1.2% |
Fund Performance: The Quant Small Cap Fund has given 25.68% annualized returns in the past three years and 35.61% in the last 5 years. The Quant Small Cap Fund comes under the Equity category of Quant Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Quant Small Cap Fund via lump sum is ₹5,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹29,287Cr |
| 1Y Returns | -4.1% |
Fund Performance: The HDFC Small Cap Fund has given 23.92% annualized returns in the past three years and 31.46% in the last 5 years. The HDFC Small Cap Fund comes under the Equity category of HDFC Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in HDFC Small Cap Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹36,827Cr |
| 1Y Returns | 2.0% |
Fund Performance: The Nippon India Small Cap Fund has given 23.78% annualized returns in the past three years and 33.83% in the last 5 years. The Nippon India Small Cap Fund comes under the Equity category of Nippon India Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Nippon India Small Cap Fund via lump sum is ₹5,000 and via SIP is ₹100.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹66,136Cr |
| 1Y Returns | -5.3% |
Fund Performance: The Franklin India Small Cap Fund has given 23.15% annualized returns in the past three years and 30.16% in the last 5 years. The Franklin India Small Cap Fund comes under the Equity category of Franklin Templeton Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Franklin India Small Cap Fund via lump sum is ₹5,000 and via SIP is ₹500.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹13,265Cr |
| 1Y Returns | -6.5% |
Fund Performance: The Edelweiss Small Cap Fund has given 22.03% annualized returns in the past three years and 30.71% in the last 5 years. The Edelweiss Small Cap Fund comes under the Equity category of Edelweiss Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Edelweiss Small Cap Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹5,057Cr |
| 1Y Returns | -2.8% |
Fund Performance: The Tata Small Cap Fund has given 21.19% annualized returns in the past three years and 31.54% in the last 5 years. The Tata Small Cap Fund comes under the Equity category of Tata Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Tata Small Cap Fund via lump sum is ₹5,000 and via SIP is ₹100.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹11,637Cr |
| 1Y Returns | -9.8% |
Fund Performance: The ITI Small Cap Fund has given 28.36% annualized returns in the past three years and 27.06% in the last 5 years. The ITI Small Cap Fund comes under the Equity category of ITI Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in ITI Small Cap Fund via lump sum is ₹5,000 and via SIP is ₹500.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹2,666Cr |
| 1Y Returns | -0.3% |
Fund Performance: The Aditya Birla Sun Life Nifty Smallcap 50 Index Fund comes under the Equity category of Aditya Birla Sun Life Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Aditya Birla Sun Life Nifty Smallcap 50 Index Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹247Cr |
| 1Y Returns | -4.3% |
Fund Performance: The Axis Nifty Smallcap 50 Index Fund comes under the Equity category of Axis Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Axis Nifty Smallcap 50 Index Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹535Cr |
| 1Y Returns | -4.5% |
Fund Performance: The Sundaram Small Cap Fund has given 21.97% annualized returns in the past three years and 29.17% in the last 5 years. The Sundaram Small Cap Fund comes under the Equity category of Sundaram Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Sundaram Small Cap Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹3,340Cr |
| 1Y Returns | -0.9% |
Fund Performance: The Bank of India Small Cap Fund has given 21.41% annualized returns in the past three years and 29.93% in the last 5 years. The Bank of India Small Cap Fund comes under the Equity category of Bank of India Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Bank of India Small Cap Fund via lump sum is ₹5,000 and via SIP is ₹1,000.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹1,925Cr |
| 1Y Returns | -5.7% |
Fund Performance: The HSBC Small Cap Fund has given 20.94% annualized returns in the past three years and 31.2% in the last 5 years. The HSBC Small Cap Fund comes under the Equity category of HSBC Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in HSBC Small Cap Fund via lump sum is ₹5,000 and via SIP is ₹500.
| Min Investment Amt | ₹5,000 |
|---|---|
| AUM | ₹16,040Cr |
| 1Y Returns | -8.9% |
Fund Performance: The Axis Small Cap Fund has given 20.03% annualized returns in the past three years and 27.42% in the last 5 years. The Axis Small Cap Fund comes under the Equity category of Axis Mutual Funds.
Minimum Investment Amount: The minimum amount required to invest in Axis Small Cap Fund via lump sum is ₹100 and via SIP is ₹100.
| Min Investment Amt | ₹100 |
|---|---|
| AUM | ₹25,975Cr |
| 1Y Returns | -0.3% |
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