The small-cap mutual fund category has recently slid by 6% in a week. However, a closer look at its performance reveals a more positive trend: the category has risen by 37.77% in one year, 21.89% over three years, 31.09% in five years, and 18.98% in the ten-year period, according to Value Research data.
Several small-cap funds have outperformed their benchmarks over the past five years.
Performance overview
Below are the small-cap mutual funds that have outperformed their respective benchmarks over the last five years:
| Fund Name | Benchmark | 5-Year Return (Fund) | 5-Year Return (Benchmark) |
| Quant Small Cap Fund | NIFTY Smallcap 250 TRI | 47.51% | 31.17% |
| Nippon India Small Cap Fund | NIFTY Smallcap 250 TRI | 37.07% | 31.17% |
| Bank of India Small Cap Fund | NIFTY Smallcap 250 TRI | 38.84% | 31.17% |
| Canara Robeco Small Cap Fund | NIFTY Smallcap 250 TRI | 35.90% | 31.17% |
| DSP Small Cap Fund | BSE 250 SmallCap TRI | 31.95% | 30.56% |
| Edelweiss Small Cap Fund | NIFTY Smallcap 250 TRI | 34.85% | 31.17% |
| Tata Small Cap Fund | NIFTY Smallcap 250 TRI | 35.31% | 31.17% |
| Kotak Small Cap Fund | NIFTY Smallcap 250 TRI | 33.12% | 31.17% |
| Franklin India Smaller Companies Fund | NIFTY Smallcap 250 TRI | 30.26% | 31.17% |
| HDFC Small Cap Fund | BSE 250 SmallCap TRI | 29.71% | 30.56% |
| Invesco India Smallcap Fund | BSE 250 SmallCap TRI | 33.53% | 30.56% |
| Sundaram Small Cap Fund | NIFTY Smallcap 250 TRI | 31.01% | 31.17% |
| HSBC Small Cap Fund | NIFTY Smallcap 250 TRI | 32.38% | 31.17% |
| LIC MF Small Cap Fund | NIFTY Smallcap 250 TRI | 30.32% | 31.17% |
| Axis Small Cap Fund | NIFTY Smallcap 250 TRI | 29.17% | 31.17% |
(Source: AMFI data)
Investment considerations
While these funds have demonstrated strong performance, returns should not be the only factor to see when investing in a mutual fund. Investors should note that:
- Small-cap stocks can be more volatile than larger counterparts, which can lead to significant price fluctuations.
- These funds generally perform better with a long-term investment approach.
- A minimum horizon of five years is advisable.
- Investors should be mindful of economic trends that could affect small-cap performance, including interest rates and inflation.
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