Small Cap Mutual Funds in India
Updated June 2026 · 39 active funds · data from AMFI NAVs · benchmark: NIFTY Smallcap 250 TRI
Small Cap funds invest at least 65% of assets in small-cap stocks - SEBI defines these as companies ranked beyond the top 250 by full market capitalization, i.e. the 251st company onward. This is the smallest, fastest-growing and riskiest end of the listed market: under-researched businesses that can multiply in value but also fall hardest, with the lowest liquidity of any cap segment. Small-cap funds have historically produced the highest long-run returns among equity categories, but with extreme volatility, the deepest drawdowns, and long recovery periods after market crashes; funds sometimes restrict lump-sum inflows when valuations stretch. In a portfolio they are a high-conviction satellite for investors with a long horizon and strong risk appetite, never a core holding. The default benchmark on FindMF is the NIFTY Smallcap 250 TRI, which tracks the small-cap universe on a total-return basis. FindMF computes trailing returns, CAGR, volatility, Sharpe, Sortino, maximum drawdown and alpha/beta against the NIFTY Smallcap 250 TRI from AMFI daily NAVs using a disclosed methodology, so you can weigh each fund's reward against its very real downside.
Who it suits: High-risk-appetite investors with a long horizon (often 7-10 years) seeking maximum growth potential and able to tolerate severe drawdowns.
63% of the 30 funds here with a computed alpha beat their benchmark over the measured window (positive alpha). Past performance is not indicative; this is analysis, not advice.
| # | Scheme | 1Y | 3Y | 5Y | Sharpe | Max DD | TER | AUM |
|---|---|---|---|---|---|---|---|---|
| 1 | BANDHAN SMALL CAP FUND Bandhan | +0.24% | +28.17% | +20.72% | 0.88 | -24.3% | 0.67% | ₹19.9K Cr |
| 2 | ITI Small Cap Fund ITI | +4.35% | +24.95% | +16.79% | 0.70 | -29.2% | 0.75% | ₹2.7K Cr |
| 3 | Invesco India Smallcap Fund Invesco | +2.84% | +22.89% | +20.42% | 0.89 | -23.4% | 0.46% | ₹9.4K Cr |
| 4 | Mahindra Manulife Small Cap Fund Mahindra Manulife | +3.37% | +22.41% | - | 0.90 | -26.0% | 0.74% | ₹4.0K Cr |
| 5 | BANK OF INDIA Small Cap Fund Bank of India | +9.44% | +21.93% | +19.98% | 0.79 | -27.1% | 0.61% | ₹1.9K Cr |
| 6 | quant Small Cap Fund quant | +3.56% | +20.12% | +20.58% | 0.83 | -25.2% | 1.23% | ₹27.7K Cr |
| 7 | Union Small Cap Fund Union | +11.91% | +19.09% | +17.55% | 0.73 | -26.2% | 1.83% | ₹1.7K Cr |
| 8 | DSP Small Cap Fund DSP | +3.75% | +18.99% | +18.02% | 0.72 | -24.1% | 0.83% | ₹16.4K Cr |
| 9 | Sundaram Small Cap Fund Sundaram | +3.94% | +18.68% | +17.48% | 0.76 | -23.8% | 1.07% | ₹3.3K Cr |
| 10 | Edelweiss Small Cap Fund Edelweiss | +0.75% | +18.12% | +18.12% | 0.81 | -22.9% | 0.72% | ₹5.4K Cr |
| 11 | Nippon India Small Cap Fund Nippon India | -0.29% | +18.00% | +19.96% | 0.88 | -24.2% | 0.65% | ₹66.1K Cr |
| 12 | Aditya Birla Sun Life Small Cap Fund Aditya Birla Sun Life | +4.01% | +16.97% | +13.72% | 0.55 | -26.2% | 0.91% | ₹4.8K Cr |
| 13 | Franklin India Small Cap Fund Franklin Templeton | -4.52% | +16.45% | +17.61% | 0.74 | -24.1% | 1.06% | ₹12.8K Cr |
| 14 | UTI Small Cap Fund UTI | -1.86% | +16.12% | +16.18% | 0.70 | -22.3% | 0.76% | ₹4.5K Cr |
| 15 | HSBC Small Cap Fund HSBC | -2.74% | +16.11% | - | 0.57 | -27.2% | 0.76% | ₹15.1K Cr |
| 16 | PGIM India Small Cap Fund PGIM India | +4.86% | +16.08% | - | 0.38 | -24.6% | 0.87% | ₹1.5K Cr |
| 17 | Axis Small Cap Fund Axis | -0.71% | +15.85% | +17.10% | 0.79 | -19.4% | 0.66% | ₹25.6K Cr |
| 18 | CANARA ROBECO SMALL CAP FUND Canara Robeco | -2.69% | +14.11% | +16.77% | 0.74 | -23.6% | 0.68% | ₹12.6K Cr |
| 19 | HDFC Small Cap Fund HDFC | -4.83% | +13.95% | +16.50% | 0.74 | -22.6% | 0.77% | ₹36.6K Cr |
| 20 | Kotak - Small Cap Fund Kotak Mahindra | -3.82% | +13.84% | +14.18% | 0.58 | -24.7% | 0.55% | ₹16.5K Cr |
Ranked by trailing return (3Y where available, else 1Y) on funds with at least one year of history. Returns, Sharpe, drawdown and TER are computed independently from AMFI NAVs - see methodology. No paid placement.
Frequently asked questions
How are Small Cap funds taxed?
Small Cap funds are equity-oriented (over 65% Indian equity), so short-term gains on units held under 12 months are taxed at 20%, and long-term gains on units held 12 months or more are taxed at 12.5% on gains above Rs 1.25 lakh per financial year.
What expense ratio is reasonable, and how do I compare Small Cap funds?
Small-cap research is resource-heavy, so direct-plan TERs are often among the higher equity ratios. Given how violently small caps swing, compare funds on FindMF primarily on risk-adjusted metrics - Sortino, maximum drawdown, and alpha versus the NIFTY Smallcap 250 TRI - alongside TER, all computed from AMFI NAVs, rather than on a single explosive year.
Why are Small Cap funds considered the riskiest equity category?
Small-cap stocks are illiquid and lightly researched, so they can drop 50% or more in a downturn and take years to recover. Liquidity can dry up exactly when investors want to exit. FindMF's drawdown and volatility figures, derived from AMFI NAVs, show how severe past falls have been for each fund.
Should I invest a lump sum or SIP into Small Cap funds?
Because valuations and volatility are extreme, many investors stagger entry via SIP rather than a single lump sum; some funds even cap lump-sum inflows. FindMF does not give personal advice, but its long-run CAGR and drawdown data help you assess whether a fund's history matches your horizon and risk tolerance.