+91-22-48913909Should You Invest in Small-Cap Funds? Risks, Returns & Strategy Explained
Small-cap Mutual Funds have gained tremendous popularity in India over the last few years. Some investors have doubled their wealth, while others have earned higher returns than many large-cap or mid cap funds. But small-cap Investing comes with high rewards and high risks.
In this article, we’ll break down everything you need to know about Small cap funds, including their benefits, risks, investment strategies, and tips to make them work for you.
India’s Growth Story and Why Small Companies Matter
India’s Small and Medium Enterprises (SMEs) already contribute over 30% of the country’s GDP and employ millions of people. With initiatives like Digital India, Startup India, and Production-Linked Incentive (PLI) schemes, many small firms are scaling rapidly. Some of these companies will transition into mid-cap territory, while a few could even become large-cap leaders of tomorrow.
When you invest in small-cap funds, you are essentially betting on India’s entrepreneurship and growth story. Historically, small companies with strong execution and scalability have delivered remarkable wealth creation opportunities.
Example - Early-stage Infosys in the 1990s was a small IT firm that became a global powerhouse. DMart started as a small retail chain before becoming a market favourite.
Understanding Small-Cap Funds
Small-cap mutual funds invest primarily in smaller companies that are ranked below the top 250 on the stock exchange, typically with a market capitalization between ₹500 crore and ₹5,000 crore. These companies are often in their growth phase, with potential to expand into mid-cap or large-cap territory over time. Examples include 3M India, LIC Housing Finance, Apollo Tyres, Tata Technologies, and TVS Holdings.
Think of small-cap companies like your local kirana store versus a nationwide retail chain. Today, the kirana store is small, but with growth, it could become the next DMart. The potential for high returns exists, but many small companies may also fail to scale.
How Small-Cap Funds Differ from Other Funds
Large cap funds: Invest in well-established companies with stable earnings and proven track records. Returns tend to be steady, but growth is moderate.
Mid-cap funds: Focus on medium-sized companies with growth potential, but with moderate risk.
Small-cap funds: Target small, emerging companies that can deliver exceptional long-term returns, but carry higher Volatility and risk.
Benefits of Small-Cap Funds
High Growth Potential: Small companies today may become the leaders of tomorrow, offering significant wealth creation opportunities. They have room to grow 5x, 10x, or even 20x, offering extraordinary long-term wealth creation potential.
Long-Term Wealth Creation: Historically, small-cap indices have delivered higher CAGR than large-cap indices, showing strong compounding potential. Consider the Nifty Smallcap 250 index, which has historically delivered around 15% CAGR since inception, compared to 12% for large-caps.
Example:
- ₹10 lakh invested in large-caps over 15 years → ₹54 lakh
- ₹10 lakh invested in small-caps over 15 years → ₹81 lakh
That’s the Power of Compounding.
Why Small-Cap Funds Have Rallied Recently
Strong growth in India’s SMEs and startups, combined with rising SIP inflows and institutional interest, has pushed small-cap funds higher in the last few years.
2023–24 Performance - Many small-cap funds delivered returns of over 35%, compared to 18–20% in large-caps.
Historical Perspective- Historically, small-cap funds have delivered returns well above large-caps during bullish phases. For example, some small-cap funds have given 35%+ annualized returns, compared to 18–20% for large-cap funds. However, volatility is high, and markets have experienced significant corrections, such as the 2017–18 small-cap crash.
How to Plan Your Investment Strategy in Small-Caps
1. Define Your Goal
Small-cap funds are extremely volatile in the short term — they can fall 30–40% in a single year. They are suitable only for long-term goals (7–10 years or more). Avoid using small-caps for short-term needs like a car purchase or wedding expenses.
2. SIP vs. Lump Sum
Investing via Systematic Investment plan (SIPs) smooths volatility:
- When markets fall, your SIP buys more units — like shopping during a sale.
- When markets rise, you buy fewer units, but older units appreciate.
Example:
- SIP of ₹10,000/month since 2018 → survived a 40% crash in 2018 and still delivered ~18–20% CAGR.
- Lump sum investment at market peak → could take years to recover.
3. Asset Allocation — Age, Market Cycle, and Risk Capital
Age - Younger investors can take more risk (15–20% in small-caps), while older investors should reduce exposure (under 10%, or even 5% for preservation).
Market Cycle - Avoid overloading during market highs. Increase allocation during downturns for maximum wealth creation.
Risk Capital - Only invest money you can lock in for 7–10 years. Treat it like venture capital within your Portfolio.
4. Entry & Exit Strategy
- Reduce exposure when valuations are extremely high (e.g., P/E ratios of 60–70x).
- Increase SIPs or allocation during market corrections — downturns are opportunities for long-term gains.
- Think of small-caps like a spice in your food — a little enhances the flavour, too much can burn your mouth.
Risks to Consider Before Investing in Small-Cap Funds
While small-cap funds offer high growth potential, they come with significant risks. Understanding these risks is crucial before investing.
1. Volatility
Small-cap funds are highly volatile, meaning their prices can swing dramatically in short periods. Unlike large-cap companies, smaller companies often have limited resources and market presence, so any negative news, weak earnings, or market downturn can cause sharp declines.
*Example- * During the COVID-19 crash in March 2020, the Nifty Smallcap 250 index fell by nearly 40%, while the Nifty 50 (large-cap index) fell around 25%. Imagine investing ₹10 lakh — your portfolio could suddenly drop to ₹6 lakh. While long-term investors can recover, short-term investors may face heavy losses.
2. Liquidity Risk
Liquidity refers to how easily an asset can be bought or sold without affecting its price. Many small-cap stocks are thinly traded, meaning there are fewer buyers and sellers in the market.
- If a large investor or institution decides to exit, the price of these stocks can drop sharply.
- This makes it difficult to sell your holdings quickly at a fair price during market downturns.
Tip: Small-cap funds are not suitable for short-term money. Only invest money you can leave untouched for at least 7–10 years.
3. Overvaluation Concerns
- Small-cap stocks can sometimes trade at extremely high valuations compared to their earnings potential.
- Many small-caps today are trading at 60–70x earnings, whereas large-cap stocks generally trade around 20x earnings.
- High valuations leave little margin of safety — if growth slows, stock prices can drop sharply.
*Example- * In early 2018, some small-cap funds were priced at extreme multiples, and when the market corrected, the Nifty Smallcap index fell almost 40% in a year. Investors who bought at peak valuations suffered significant losses.
4. History Repeats: Greed and Fear Cycles
- The small-cap market often experiences cycles of greed and fear.
- In 2017, small-cap funds delivered 50%+ returns, attracting many new investors.
- By 2018, the market corrected, and the same index crashed over 40%, wiping out gains for late entrants.
This pattern shows that high returns in one year can be followed by steep corrections. Timing and patience are crucial, and emotional investing can lead to losses.
Fund Selection Methodology used to Find 10 Funds
Top and Best Small-Cap Funds to Consider 2025
Fund NAV Net Assets (Cr) Min SIP Investment 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2025 (%) Nippon India Small Cap Fund Growth ₹179.856
↓ -1.60 ₹74,604 100 17.7 7.7 4 17.7 19.5 -4.7 DSP Small Cap Fund Growth ₹219.335
↓ -0.52 ₹18,358 500 19.3 10.3 8.7 18.5 17.9 -2.8 IDBI Small Cap Fund Growth ₹33.4338
↓ -0.37 ₹695 500 23 13.4 9.4 17.6 17.6 -13.4 Sundaram Small Cap Fund Growth ₹290.074
↑ 1.85 ₹3,681 100 21.6 10.2 10.6 18.8 17.1 0.4 Franklin India Smaller Companies Fund Growth ₹176.326
↓ -1.29 ₹13,847 500 15.8 5.7 0 15.6 17 -8.4 HDFC Small Cap Fund Growth ₹137.891
↓ -0.82 ₹38,809 300 11.3 -1.1 -2.7 12.8 15.6 -0.6 ICICI Prudential Smallcap Fund Growth ₹88.89
↓ -0.78 ₹8,949 100 14.5 3.2 -0.2 12.4 14.5 -0.4 SBI Small Cap Fund Growth ₹178.951
↓ -0.86 ₹37,395 500 17.8 6.3 2.2 12.9 13.7 -4.9 Kotak Small Cap Fund Growth ₹267.117
↓ -1.99 ₹17,806 1,000 17.6 6.5 -0.2 13 13.2 -9.1 Aditya Birla Sun Life Small Cap Fund Growth ₹94.986
↓ -0.68 ₹5,453 1,000 19.9 10.5 8.6 16.4 13 -3.7 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 7 Jul 26 Research Highlights & Commentary of 10 Funds showcased
Commentary Nippon India Small Cap Fund DSP Small Cap Fund IDBI Small Cap Fund Sundaram Small Cap Fund Franklin India Smaller Companies Fund HDFC Small Cap Fund ICICI Prudential Smallcap Fund SBI Small Cap Fund Kotak Small Cap Fund Aditya Birla Sun Life Small Cap Fund Point 1 Highest AUM (₹74,604 Cr). Upper mid AUM (₹18,358 Cr). Bottom quartile AUM (₹695 Cr). Bottom quartile AUM (₹3,681 Cr). Lower mid AUM (₹13,847 Cr). Top quartile AUM (₹38,809 Cr). Lower mid AUM (₹8,949 Cr). Upper mid AUM (₹37,395 Cr). Upper mid AUM (₹17,806 Cr). Bottom quartile AUM (₹5,453 Cr). Point 2 Established history (15+ yrs). Established history (19+ yrs). Established history (9+ yrs). Oldest track record among peers (21 yrs). Established history (20+ yrs). Established history (18+ yrs). Established history (18+ yrs). Established history (16+ yrs). Established history (21+ yrs). Established history (19+ yrs). Point 3 Rating: 4★ (upper mid). Rating: 4★ (upper mid). Not Rated. Rating: 3★ (lower mid). Rating: 4★ (upper mid). Rating: 4★ (lower mid). Rating: 3★ (bottom quartile). Top rated. Rating: 3★ (bottom quartile). Rating: 5★ (top quartile). Point 4 Risk profile: Moderately High. Risk profile: Moderately High. Risk profile: Moderately High. Risk profile: Moderately High. Risk profile: Moderately High. Risk profile: Moderately High. Risk profile: Moderately High. Risk profile: Moderately High. Risk profile: Moderately High. Risk profile: Moderately High. Point 5 5Y return: 19.48% (top quartile). 5Y return: 17.89% (top quartile). 5Y return: 17.56% (upper mid). 5Y return: 17.12% (upper mid). 5Y return: 16.95% (upper mid). 5Y return: 15.61% (lower mid). 5Y return: 14.51% (lower mid). 5Y return: 13.69% (bottom quartile). 5Y return: 13.17% (bottom quartile). 5Y return: 12.95% (bottom quartile). Point 6 3Y return: 17.67% (upper mid). 3Y return: 18.47% (top quartile). 3Y return: 17.63% (upper mid). 3Y return: 18.77% (top quartile). 3Y return: 15.58% (lower mid). 3Y return: 12.78% (bottom quartile). 3Y return: 12.37% (bottom quartile). 3Y return: 12.94% (bottom quartile). 3Y return: 13.03% (lower mid). 3Y return: 16.42% (upper mid). Point 7 1Y return: 4.00% (upper mid). 1Y return: 8.70% (upper mid). 1Y return: 9.39% (top quartile). 1Y return: 10.64% (top quartile). 1Y return: 0.02% (lower mid). 1Y return: -2.75% (bottom quartile). 1Y return: -0.17% (bottom quartile). 1Y return: 2.20% (lower mid). 1Y return: -0.20% (bottom quartile). 1Y return: 8.62% (upper mid). Point 8 Alpha: 2.35 (upper mid). Alpha: 0.00 (upper mid). Alpha: 5.40 (top quartile). Alpha: 7.77 (top quartile). Alpha: -2.10 (bottom quartile). Alpha: 0.00 (upper mid). Alpha: -2.06 (bottom quartile). Alpha: 0.00 (lower mid). Alpha: -3.80 (bottom quartile). Alpha: 0.00 (lower mid). Point 9 Sharpe: 0.05 (upper mid). Sharpe: 0.13 (upper mid). Sharpe: 0.17 (upper mid). Sharpe: 0.26 (top quartile). Sharpe: -0.15 (lower mid). Sharpe: -0.31 (bottom quartile). Sharpe: -0.17 (lower mid). Sharpe: -0.22 (bottom quartile). Sharpe: -0.25 (bottom quartile). Sharpe: 0.23 (top quartile). Point 10 Information ratio: -0.24 (lower mid). Information ratio: 0.00 (top quartile). Information ratio: -0.35 (lower mid). Information ratio: -0.16 (upper mid). Information ratio: -0.62 (bottom quartile). Information ratio: 0.00 (top quartile). Information ratio: -0.90 (bottom quartile). Information ratio: 0.00 (upper mid). Information ratio: -0.96 (bottom quartile). Information ratio: 0.00 (upper mid). Nippon India Small Cap Fund
DSP Small Cap Fund
IDBI Small Cap Fund
Sundaram Small Cap Fund
Franklin India Smaller Companies Fund
HDFC Small Cap Fund
ICICI Prudential Smallcap Fund
SBI Small Cap Fund
Kotak Small Cap Fund
Aditya Birla Sun Life Small Cap Fund
All the funds mentioned above are ideal, we are giving you detailed analysis of 5 funds.
The primary investment objective of the scheme is to generate long term capital appreciation by investing predominantly in equity and equity related instruments of small cap companies and the secondary objective is to generate consistent returns by investing in debt and money market securities. Below is the key information for Nippon India Small Cap Fund Returns up to 1 year are on (Erstwhile DSP BlackRock Micro Cap Fund) The primary investment objective is to seek to generate long term capital appreciation from a portfolio that is substantially constituted of equity and equity related securities of small cap companies. From time to time, the fund manager will also seek participation in other equity and equity related securities to achieve optimal portfolio construction. There is no assurance that the investment objective of the Scheme will be realized Research Highlights for DSP Small Cap Fund Below is the key information for DSP Small Cap Fund Returns up to 1 year are on The Investment objective of the Scheme is to provide investors with the opportunities for long-term capital appreciation by investing predominantly in Equity and Equity related instruments of Small Cap companies. However
there can be no assurance that the investment objective under the Scheme will be realized. Research Highlights for IDBI Small Cap Fund Below is the key information for IDBI Small Cap Fund Returns up to 1 year are on (Erstwhile Sundaram SMILE Fund) To primarily achieve capital appreciation by
investing in diversified stocks that are
generally termed as small and mid-caps and
by investing in other equities. Research Highlights for Sundaram Small Cap Fund Below is the key information for Sundaram Small Cap Fund Returns up to 1 year are on The Fund seeks to provide long-term capital appreciation by investing in mid and small cap companies. Research Highlights for Franklin India Smaller Companies Fund Below is the key information for Franklin India Smaller Companies Fund Returns up to 1 year are on 1. Nippon India Small Cap Fund
Nippon India Small Cap Fund
Growth Launch Date 16 Sep 10 NAV (07 Jul 26) ₹179.856 ↓ -1.60 (-0.88 %) Net Assets (Cr) ₹74,604 on 31 May 26 Category Equity - Small Cap AMC Nippon Life Asset Management Ltd. Rating ☆☆☆☆ Risk Moderately High Expense Ratio 1.44 Sharpe Ratio 0.05 Information Ratio -0.24 Alpha Ratio 2.35 Min Investment 5,000 Min SIP Investment 100 Exit Load 0-1 Years (1%),1 Years and above(NIL) Growth of 10,000 investment over the years.
Date Value 30 Jun 21 ₹10,000 30 Jun 22 ₹10,860 30 Jun 23 ₹15,169 30 Jun 24 ₹23,621 30 Jun 25 ₹24,128 30 Jun 26 ₹25,102 Returns for Nippon India Small Cap Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 7 Jul 26 Duration Returns 1 Month 4% 3 Month 17.7% 6 Month 7.7% 1 Year 4% 3 Year 17.7% 5 Year 19.5% 10 Year 15 Year Since launch 20.1% Historical performance (Yearly) on absolute basis
Year Returns 2025 -4.7% 2024 26.1% 2023 48.9% 2022 6.5% 2021 74.3% 2020 29.2% 2019 -2.5% 2018 -16.7% 2017 63% 2016 5.6% Fund Manager information for Nippon India Small Cap Fund
Name Since Tenure Samir Rachh 2 Jan 17 9.5 Yr. Kinjal Desai 25 May 18 8.11 Yr. Amber Singhania 11 Mar 26 0.31 Yr. Data below for Nippon India Small Cap Fund as on 31 May 26
Equity Sector Allocation
Sector Value Industrials 24.65% Financial Services 15.05% Consumer Cyclical 14.19% Basic Materials 11.05% Health Care 9.49% Consumer Defensive 9.04% Technology 7.05% Utility 3.27% Communication Services 1.65% Real Estate 0.78% Energy 0.43% Asset Allocation
Asset Class Value Cash 2.9% Equity 97.1% Top Securities Holdings / Portfolio
Name Holding Value Quantity Bharat Heavy Electricals Ltd (Industrials)
Equity, Since 30 Sep 22 | BHEL2% ₹1,438 Cr 34,507,422 HDFC Bank Ltd (Financial Services)
Equity, Since 30 Apr 22 | HDFCBANK2% ₹1,322 Cr 17,754,929 TD Power Systems Ltd (Industrials)
Equity, Since 31 Dec 15 | TDPOWERSYS2% ₹1,277 Cr 9,680,747 Multi Commodity Exchange of India Ltd (Financial Services)
Equity, Since 28 Feb 21 | MCX2% ₹1,169 Cr 3,957,067
↓ -342,933 Apar Industries Ltd (Industrials)
Equity, Since 31 Mar 17 | APARINDS2% ₹1,154 Cr 879,502 State Bank of India (Financial Services)
Equity, Since 31 Oct 19 | SBIN1% ₹964 Cr 10,000,000
↑ 2,000,000 NLC India Ltd (Utilities)
Equity, Since 31 Oct 22 | NLCINDIA1% ₹938 Cr 26,990,331 Karur Vysya Bank Ltd (Financial Services)
Equity, Since 28 Feb 17 | KARURVYSYA1% ₹921 Cr 31,907,252 Zydus Wellness Ltd (Consumer Defensive)
Equity, Since 31 Aug 16 | ZYDUSWELL1% ₹876 Cr 17,273,570 Tube Investments of India Ltd Ordinary Shares (Industrials)
Equity, Since 30 Apr 18 | TIINDIA1% ₹785 Cr 2,499,222 2. DSP Small Cap Fund
DSP Small Cap Fund
Growth Launch Date 14 Jun 07 NAV (07 Jul 26) ₹219.335 ↓ -0.52 (-0.24 %) Net Assets (Cr) ₹18,358 on 31 May 26 Category Equity - Small Cap AMC DSP BlackRock Invmt Managers Pvt. Ltd. Rating ☆☆☆☆ Risk Moderately High Expense Ratio 1.72 Sharpe Ratio 0.13 Information Ratio 0 Alpha Ratio 0 Min Investment 1,000 Min SIP Investment 500 Exit Load 0-12 Months (1%),12 Months and above(NIL) Growth of 10,000 investment over the years.
Date Value 30 Jun 21 ₹10,000 30 Jun 22 ₹10,594 30 Jun 23 ₹13,804 30 Jun 24 ₹19,548 30 Jun 25 ₹21,421 30 Jun 26 ₹23,103 Returns for DSP Small Cap Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 7 Jul 26 Duration Returns 1 Month 5.4% 3 Month 19.3% 6 Month 10.3% 1 Year 8.7% 3 Year 18.5% 5 Year 17.9% 10 Year 15 Year Since launch 17.6% Historical performance (Yearly) on absolute basis
Year Returns 2025 -2.8% 2024 25.6% 2023 41.2% 2022 0.5% 2021 58.9% 2020 33.1% 2019 0.7% 2018 -25.5% 2017 42.8% 2016 12.7% Fund Manager information for DSP Small Cap Fund
Name Since Tenure Vinit Sambre 21 Jun 10 16.04 Yr. Data below for DSP Small Cap Fund as on 31 May 26
Equity Sector Allocation
Sector Value Consumer Cyclical 31.79% Industrials 16.23% Basic Materials 15.28% Health Care 9.25% Financial Services 8.24% Consumer Defensive 6.15% Technology 2.11% Communication Services 0.44% Asset Allocation
Asset Class Value Cash 10.5% Equity 89.5% Top Securities Holdings / Portfolio
Name Holding Value Quantity Lumax Auto Technologies Ltd (Consumer Cyclical)
Equity, Since 30 Jun 18 | LUMAXTECH5% ₹921 Cr 5,337,441
↓ -600,000 Kirloskar Oil Engines Ltd (Industrials)
Equity, Since 31 Mar 23 | 5332934% ₹725 Cr 3,762,866 Thangamayil Jewellery Ltd (Consumer Cyclical)
Equity, Since 30 Nov 21 | THANGAMAYL3% ₹628 Cr 1,493,620
↓ -91,335 Sansera Engineering Ltd (Consumer Cyclical)
Equity, Since 30 Jun 24 | SANSERA3% ₹506 Cr 1,770,029 Welspun Corp Ltd (Basic Materials)
Equity, Since 31 Mar 21 | WELCORP3% ₹470 Cr 3,411,788
↓ -343,883 Jubilant Ingrevia Ltd Ordinary Shares (Basic Materials)
Equity, Since 31 Dec 22 | JUBLINGREA2% ₹450 Cr 6,970,677
↓ -29,323 Dodla Dairy Ltd (Consumer Defensive)
Equity, Since 30 Jun 21 | DODLA2% ₹405 Cr 3,750,000 LT Foods Ltd (Consumer Defensive)
Equity, Since 31 Dec 17 | LTFOODS2% ₹392 Cr 10,000,000 SPR Auto Technologies Ltd (Consumer Cyclical)
Equity, Since 31 Aug 24 | SHRIPISTON2% ₹367 Cr 1,081,165 eClerx Services Ltd (Technology)
Equity, Since 28 Feb 18 | ECLERX2% ₹334 Cr 2,211,836 3. IDBI Small Cap Fund
IDBI Small Cap Fund
Growth Launch Date 21 Jun 17 NAV (07 Jul 26) ₹33.4338 ↓ -0.37 (-1.08 %) Net Assets (Cr) ₹695 on 31 May 26 Category Equity - Small Cap AMC IDBI Asset Management Limited Rating Risk Moderately High Expense Ratio 2.3 Sharpe Ratio 0.17 Information Ratio -0.35 Alpha Ratio 5.4 Min Investment 5,000 Min SIP Investment 500 Exit Load 0-12 Months (1%),12 Months and above(NIL) Growth of 10,000 investment over the years.
Date Value 30 Jun 21 ₹10,000 30 Jun 22 ₹10,917 30 Jun 23 ₹14,083 30 Jun 24 ₹21,728 30 Jun 25 ₹21,091 30 Jun 26 ₹23,146 Returns for IDBI Small Cap Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 7 Jul 26 Duration Returns 1 Month 5.8% 3 Month 23% 6 Month 13.4% 1 Year 9.4% 3 Year 17.6% 5 Year 17.6% 10 Year 15 Year Since launch 14.3% Historical performance (Yearly) on absolute basis
Year Returns 2025 -13.4% 2024 40% 2023 33.4% 2022 2.4% 2021 64.7% 2020 19% 2019 -4.4% 2018 -15% 2017 2016 Fund Manager information for IDBI Small Cap Fund
Name Since Tenure Dikshit Mittal 24 Jul 25 0.93 Yr. Mahesh Bendre 1 Jul 24 2 Yr. Data below for IDBI Small Cap Fund as on 31 May 26
Equity Sector Allocation
Sector Value Industrials 27.58% Basic Materials 16.22% Consumer Cyclical 14.1% Financial Services 11.08% Consumer Defensive 9.75% Health Care 6.95% Technology 6.46% Utility 2.92% Real Estate 1.49% Communication Services 0.98% Asset Allocation
Asset Class Value Cash 2.48% Equity 97.52% Top Securities Holdings / Portfolio
Name Holding Value Quantity Garware Hi-Tech Films Ltd (Basic Materials)
Equity, Since 30 Sep 25 | 5006555% ₹36 Cr 58,461
↓ -1,326 Avalon Technologies Ltd (Technology)
Equity, Since 31 Aug 23 | AVALON4% ₹26 Cr 167,845
↓ -3,517 Navin Fluorine International Ltd (Basic Materials)
Equity, Since 30 Sep 19 | NAVINFLUOR3% ₹21 Cr 29,286 Manorama Industries Ltd (Consumer Defensive)
Equity, Since 31 Dec 24 | 5419743% ₹20 Cr 142,461
↑ 22,179 KSH International Ltd (Industrials)
Equity, Since 31 Dec 25 | KSHINTL3% ₹18 Cr 233,215
↓ -16,165 Allied Blenders and Distillers Ltd (Consumer Defensive)
Equity, Since 31 Jul 24 | ABDL3% ₹18 Cr 326,615 Schneider Electric Infrastructure Ltd (Industrials)
Equity, Since 31 Aug 25 | SCHNEIDER3% ₹17 Cr 133,576 Arvind Fashions Ltd (Consumer Cyclical)
Equity, Since 29 Feb 24 | ARVINDFASN2% ₹17 Cr 361,684
↑ 53,437 Kirloskar Oil Engines Ltd (Industrials)
Equity, Since 28 Feb 21 | 5332932% ₹15 Cr 78,792 Pricol Ltd (Consumer Cyclical)
Equity, Since 30 Sep 25 | PRICOLLTD2% ₹13 Cr 237,103
↑ 23,351 4. Sundaram Small Cap Fund
Sundaram Small Cap Fund
Growth Launch Date 15 Feb 05 NAV (07 Jul 26) ₹290.074 ↑ 1.85 (0.64 %) Net Assets (Cr) ₹3,681 on 31 May 26 Category Equity - Small Cap AMC Sundaram Asset Management Company Ltd Rating ☆☆☆ Risk Moderately High Expense Ratio 1.94 Sharpe Ratio 0.26 Information Ratio -0.16 Alpha Ratio 7.77 Min Investment 5,000 Min SIP Investment 100 Exit Load 0-12 Months (1%),12 Months and above(NIL) Growth of 10,000 investment over the years.
Date Value 30 Jun 21 ₹10,000 30 Jun 22 ₹10,058 30 Jun 23 ₹13,324 30 Jun 24 ₹19,270 30 Jun 25 ₹20,299 30 Jun 26 ₹22,202 Returns for Sundaram Small Cap Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 7 Jul 26 Duration Returns 1 Month 5.4% 3 Month 21.6% 6 Month 10.2% 1 Year 10.6% 3 Year 18.8% 5 Year 17.1% 10 Year 15 Year Since launch 17.1% Historical performance (Yearly) on absolute basis
Year Returns 2025 0.4% 2024 19.1% 2023 45.3% 2022 -2.1% 2021 60.3% 2020 26.2% 2019 -6.1% 2018 -29.2% 2017 55.6% 2016 -0.1% Fund Manager information for Sundaram Small Cap Fund
Name Since Tenure Rohit Seksaria 1 Nov 22 3.67 Yr. Shalav Saket 20 Mar 26 0.28 Yr. Data below for Sundaram Small Cap Fund as on 31 May 26
Equity Sector Allocation
Sector Value Consumer Cyclical 20.24% Financial Services 20.17% Industrials 20.05% Health Care 11.76% Basic Materials 8.17% Technology 4.19% Communication Services 4.18% Consumer Defensive 2.39% Real Estate 1.81% Utility 1.2% Asset Allocation
Asset Class Value Cash 4.97% Equity 94.17% Debt 0.85% Other 0% Top Securities Holdings / Portfolio
Name Holding Value Quantity MTAR Technologies Ltd (Industrials)
Equity, Since 31 Dec 24 | MTARTECH6% ₹209 Cr 264,884
↓ -25,000 Aster DM Healthcare Ltd Ordinary Shares (Healthcare)
Equity, Since 30 Nov 23 | ASTERDM3% ₹122 Cr 1,681,362 SJS Enterprises Ltd (Consumer Cyclical)
Equity, Since 31 Aug 23 | SJS3% ₹122 Cr 577,256 Rategain Travel Technologies Ltd (Technology)
Equity, Since 30 Jun 23 | RATEGAIN3% ₹115 Cr 1,534,556 PNB Housing Finance Ltd (Financial Services)
Equity, Since 31 Jul 24 | PNBHOUSING3% ₹99 Cr 957,209 Craftsman Automation Ltd (Consumer Cyclical)
Equity, Since 30 Jun 24 | CRAFTSMAN3% ₹96 Cr 105,565
↓ -974 Eternal Ltd (Consumer Cyclical)
Equity, Since 30 Nov 24 | ETERNAL2% ₹91 Cr 3,614,474
↑ 152,705 Affle 3i Ltd (Communication Services)
Equity, Since 31 May 21 | AFFLE2% ₹89 Cr 606,603
↑ 12,325 E I D Parry India Ltd (Basic Materials)
Equity, Since 31 Jul 24 | EIDPARRY2% ₹79 Cr 1,045,263 DCB Bank Ltd (Financial Services)
Equity, Since 30 Sep 24 | DCBBANK2% ₹78 Cr 4,443,809 5. Franklin India Smaller Companies Fund
Franklin India Smaller Companies Fund
Growth Launch Date 13 Jan 06 NAV (07 Jul 26) ₹176.326 ↓ -1.29 (-0.73 %) Net Assets (Cr) ₹13,847 on 31 May 26 Category Equity - Small Cap AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆☆☆☆ Risk Moderately High Expense Ratio 1.72 Sharpe Ratio -0.15 Information Ratio -0.62 Alpha Ratio -2.1 Min Investment 5,000 Min SIP Investment 500 Exit Load 0-1 Years (1%),1 Years and above(NIL) Growth of 10,000 investment over the years.
Date Value 30 Jun 21 ₹10,000 30 Jun 22 ₹10,307 30 Jun 23 ₹14,537 30 Jun 24 ₹23,249 30 Jun 25 ₹22,705 30 Jun 26 ₹22,664 Returns for Franklin India Smaller Companies Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 7 Jul 26 Duration Returns 1 Month 3.8% 3 Month 15.8% 6 Month 5.7% 1 Year 0% 3 Year 15.6% 5 Year 17% 10 Year 15 Year Since launch 15% Historical performance (Yearly) on absolute basis
Year Returns 2025 -8.4% 2024 23.2% 2023 52.1% 2022 3.6% 2021 56.4% 2020 18.7% 2019 -5% 2018 -17.4% 2017 43.5% 2016 10.2% Fund Manager information for Franklin India Smaller Companies Fund
Name Since Tenure R. Janakiraman 1 Feb 11 15.42 Yr. Sandeep Manam 18 Oct 21 4.7 Yr. Akhil Kalluri 8 Sep 22 3.81 Yr. Data below for Franklin India Smaller Companies Fund as on 31 May 26
Equity Sector Allocation
Sector Value Industrials 21.8% Consumer Cyclical 17.38% Financial Services 16.94% Health Care 10.23% Basic Materials 10.06% Technology 9.52% Utility 3.54% Real Estate 3.37% Consumer Defensive 3.28% Asset Allocation
Asset Class Value Cash 3.88% Equity 96.12% Top Securities Holdings / Portfolio
Name Holding Value Quantity Equitas Small Finance Bank Ltd Ordinary Shares (Financial Services)
Equity, Since 31 Oct 20 | EQUITASBNK2% ₹337 Cr 48,064,081 Syrma SGS Technology Ltd (Technology)
Equity, Since 31 Aug 22 | SYRMA2% ₹330 Cr 3,028,902
↓ -511,395 Kirloskar Oil Engines Ltd (Industrials)
Equity, Since 30 Nov 22 | 5332932% ₹316 Cr 1,638,600 Eris Lifesciences Ltd Registered Shs (Healthcare)
Equity, Since 30 Sep 19 | ERIS2% ₹313 Cr 2,233,791 MTAR Technologies Ltd (Industrials)
Equity, Since 31 Oct 25 | MTARTECH2% ₹309 Cr 391,982
↓ -125,000 Kajaria Ceramics Ltd (Industrials)
Equity, Since 30 Apr 25 | KAJARIACER2% ₹308 Cr 2,871,241
↑ 221,585 PNB Housing Finance Ltd (Financial Services)
Equity, Since 30 Sep 24 | PNBHOUSING2% ₹280 Cr 2,721,134 Angel One Ltd Ordinary Shares (Financial Services)
Equity, Since 30 Apr 24 | ANGELONE2% ₹275 Cr 8,139,640 Brigade Enterprises Ltd (Real Estate)
Equity, Since 30 Jun 14 | BRIGADE2% ₹252 Cr 3,868,691 Aster DM Healthcare Ltd Ordinary Shares (Healthcare)
Equity, Since 31 Jul 23 | ASTERDM2% ₹250 Cr 3,431,339
↓ -494,365
Key Takeaway
Small-cap funds can generate exceptional long-term returns, but they are not for everyone. They require:
- A long-term investment horizon (7–10 years)
- Risk appetite to handle sharp ups and downs
- Strategic planning, including SIPs, proper Asset Allocation, and patience
By understanding these risks, investors can approach small-cap funds smartly, maximizing growth potential while minimizing unnecessary exposure.
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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Research Highlights for Nippon India Small Cap Fund