Investing in small-cap mutual funds can be highly rewarding, especially for investors willing to take on some risk. These funds invest in small companies with high growth potential, and though they may experience volatility, their returns can be significant over time. Let’s take a look at the top 5 small-cap funds in India and how they have performed since their inception.
1. SBI Small Cap Fund
SBI Small Cap Fund is one of the most popular small-cap funds in India. Launched in 2009, it has been delivering strong returns consistently, thanks to its focus on companies with strong fundamentals and high growth potential.
- Inception Date: September 9, 2009
- CAGR Since Inception: ~21% (approx.)
- Value of ₹1 Lakh Invested at Inception: ₹23.5 Lakhs+
This fund has benefited long-term investors immensely, with its disciplined stock-picking approach and an eye on quality.
2. HDFC Small Cap Fund
HDFC Small Cap Fund is another star performer in the small-cap category. Launched in 2008, this fund has been delivering attractive long-term returns. Despite short-term volatility, the fund manager’s strategy of picking fundamentally strong companies has paid off.
- Inception Date: April 3, 2008
- CAGR Since Inception: ~18%
- Value of ₹1 Lakh Invested at Inception: ₹19 Lakhs+
This fund has rewarded patient investors, focusing on businesses with potential for long-term growth.
3. Nippon India Small Cap Fund
Nippon India Small Cap Fund is known for its aggressive approach in picking growth-oriented small-cap stocks. Since its inception in 2010, it has become a wealth-generating machine for long-term investors.
- Inception Date: September 16, 2010
- CAGR Since Inception: ~24%
- Value of ₹1 Lakh Invested at Inception: ₹26 Lakhs+
Though this fund comes with higher volatility, it has consistently rewarded investors who stay the course.
4. Axis Small Cap Fund
Axis Small Cap Fund, launched in 2013, focuses on selecting high-quality small-cap stocks with a long-term perspective. The fund manager’s emphasis on sustainable businesses and growth prospects has contributed to its stellar performance.
- Inception Date: November 29, 2013
- CAGR Since Inception: ~23%
- Value of ₹1 Lakh Invested at Inception: ₹17.5 Lakhs+
Axis Small Cap has gained popularity among investors seeking stability and growth in the small-cap space.
5. Kotak Small Cap Fund
Kotak Small Cap Fund, which was launched in 2005, has been another strong performer in this category. With a proven track record and a diversified portfolio, it has accumulated impressive returns over the years.
- Inception Date: February 24, 2005
- CAGR Since Inception: ~20%
- Value of ₹1 Lakh Invested at Inception: ₹30 Lakhs+
This fund has helped investors build wealth through its balanced strategy of picking strong small-cap companies with sound fundamentals.
Key Takeaways for Investors
- Small-cap funds offer high-growth potential but come with higher volatility.
- Long-term investments in small-cap funds have historically generated substantial wealth.
- Investors should be prepared for short-term market fluctuations but stay focused on long-term returns.
By investing in small-cap mutual funds, investors can potentially accumulate significant wealth over time if they remain disciplined and patient. These funds have proven their worth for long-term investors, turning small investments into large returns.
