Best Small Cap Funds: 6 Top Performing Equity Mutual Funds

Small cap mutual funds are equity schemes that invest predominantly in small companies. Small cap funds have really done well and have been able to generate high returns of nearly 63.17% in three years.

As per securities and exchange board of India (SEBI) guidelines, a small cap fund is mandated to hold a minimum 65% of small cap companies in the portfolio. Small cap companies are the ones that are beyond 250 on the exchange list in terms of full market capitalization. The market cap list get updated by AMFI or SEBI.

In terms of risk-return investment option, small cap funds has the highest investment risk. The small cap stocks are extremely volatile, when the markets are bullish, they can provide the most gains, but when the bear takes hold, they fall the steepest.

Thus, while investing in small cap funds, one should be ready to deal with the turbulence involved over short term and not panic. So mall cap funds are suitable for investors who want to earn high returns and are willing to bear extreme risk and has and investment term of minimum 5 years.

In last three years, following six equity schemes have given returns above category average return of 35.97%.

Scheme Name	6-months returns (%)	1- year return(%)	3-year returns(%)	5-year returns(%)	Best year returns(%)	Worst year returns (%)	Crisil Rating
Quant Small Cap Fund	2.90	9.62	63.17	23.57	222.83	-43.55	Rank 1
Nippon India Small Cap Fund	-1.67	10.74	42.34	16.29	152.09	-35.65	Rank 2
Canara Robeco Small Cap Fund	-7.21	1.75	41.23	-	125.25	-31.23	Rank 2
Tata Small Cap Fund	0.88	18.59	39.05	-	116.69	-28.98	Rank 1
HSBC Small Cap Fund	-2.34	6.87	38.92	12.31	122.99	-42.14	Rank 3
HDFC Small Cap	2.74	13.52	38.15	13.16	126.35	-43.19	Rank 3
S&P BSE 250 SmallCap TRI (benchmark)	-5.39	0.48	33.43	7.61	-	-	-

As seen in the table above, only three schemes have given positive returns in last 6 months because of the volatility. During the worst phase and the best phase of the markets, the highest fall and biggest gains are seen from Quant Small Cap Fund. During the best trading years, the returns from all the given schemes are triple digit.Tata Small Cap Fund had the lowest fall during bad phase. Canara Robeco Small Cap Fund and Tata Small Cap Fund has not completed 5 years yet, hence the returns are not given.

All the funds considered are growth direct plans, the returns are taken from ValueResearch and ratings are from Crisil.

Disclaimer

Mutual fund investments are subject to market risk. The above-mentioned information is purely informational and doesn't guarantee any return. Greynium Information Technologies and the Author are not liable for any losses caused as a result of a decision based on the article.