+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 (%) 2024 (%) Nippon India Small Cap Fund Growth ₹150.112
↓ -2.98 ₹67,642 100 -9.5 -9.7 0.1 19.1 21 -4.7 HDFC Small Cap Fund Growth ₹121.413
↓ -2.36 ₹37,424 300 -12.1 -13.6 -0.2 15.9 18.6 -0.6 DSP Small Cap Fund Growth ₹178.847
↓ -4.01 ₹16,886 500 -8.7 -7.4 4.9 18.8 18.1 -2.8 Franklin India Smaller Companies Fund Growth ₹148.755
↓ -2.41 ₹12,934 500 -9.8 -10.3 -2 16.5 17.6 -8.4 Sundaram Small Cap Fund Growth ₹230.784
↓ -4.13 ₹3,306 100 -10.8 -9.6 2.9 17.4 17.2 0.4 IDBI Small Cap Fund Growth ₹26.411
↓ -0.60 ₹606 500 -10.1 -12.1 -5.2 15.6 16.9 -13.4 ICICI Prudential Smallcap Fund Growth ₹76.13
↓ -1.49 ₹8,355 100 -11 -12.4 -1.2 13.8 16.1 -0.4 SBI Small Cap Fund Growth ₹149.865
↓ -2.57 ₹34,932 500 -10.6 -11.5 -4.3 12 14 -4.9 Kotak Small Cap Fund Growth ₹222.908
↓ -4.58 ₹16,871 1,000 -10.7 -12.5 -5.5 13 13.7 -9.1 Aditya Birla Sun Life Small Cap Fund Growth ₹77.8047
↓ -1.67 ₹4,882 1,000 -8.3 -6.5 2.8 17.3 13.2 -3.7 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 27 Mar 26 Research Highlights & Commentary of 10 Funds showcased
Commentary Nippon India Small Cap Fund HDFC Small Cap Fund DSP Small Cap Fund Franklin India Smaller Companies Fund Sundaram Small Cap Fund IDBI 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 (₹67,642 Cr). Top quartile AUM (₹37,424 Cr). Upper mid AUM (₹16,886 Cr). Lower mid AUM (₹12,934 Cr). Bottom quartile AUM (₹3,306 Cr). Bottom quartile AUM (₹606 Cr). Lower mid AUM (₹8,355 Cr). Upper mid AUM (₹34,932 Cr). Upper mid AUM (₹16,871 Cr). Bottom quartile AUM (₹4,882 Cr). Point 2 Established history (15+ yrs). Established history (17+ yrs). Established history (18+ yrs). Established history (20+ yrs). Oldest track record among peers (21 yrs). Established history (8+ yrs). Established history (18+ yrs). Established history (16+ yrs). Established history (21+ yrs). Established history (18+ yrs). Point 3 Rating: 4★ (upper mid). Rating: 4★ (upper mid). Rating: 4★ (upper mid). Rating: 4★ (lower mid). Rating: 3★ (lower mid). Not Rated. 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: 21.00% (top quartile). 5Y return: 18.61% (top quartile). 5Y return: 18.12% (upper mid). 5Y return: 17.57% (upper mid). 5Y return: 17.19% (upper mid). 5Y return: 16.90% (lower mid). 5Y return: 16.08% (lower mid). 5Y return: 13.95% (bottom quartile). 5Y return: 13.71% (bottom quartile). 5Y return: 13.22% (bottom quartile). Point 6 3Y return: 19.11% (top quartile). 3Y return: 15.91% (lower mid). 3Y return: 18.79% (top quartile). 3Y return: 16.53% (upper mid). 3Y return: 17.37% (upper mid). 3Y return: 15.62% (lower mid). 3Y return: 13.81% (bottom quartile). 3Y return: 12.02% (bottom quartile). 3Y return: 12.99% (bottom quartile). 3Y return: 17.27% (upper mid). Point 7 1Y return: 0.09% (upper mid). 1Y return: -0.18% (upper mid). 1Y return: 4.91% (top quartile). 1Y return: -1.97% (lower mid). 1Y return: 2.86% (top quartile). 1Y return: -5.21% (bottom quartile). 1Y return: -1.25% (lower mid). 1Y return: -4.26% (bottom quartile). 1Y return: -5.52% (bottom quartile). 1Y return: 2.79% (upper mid). Point 8 Alpha: 2.58 (upper mid). Alpha: 0.00 (upper mid). Alpha: 0.00 (upper mid). Alpha: -0.83 (bottom quartile). Alpha: 6.09 (top quartile). Alpha: -1.94 (bottom quartile). Alpha: 3.69 (top quartile). Alpha: 0.00 (lower mid). Alpha: -2.10 (bottom quartile). Alpha: 0.00 (lower mid). Point 9 Sharpe: 0.76 (lower mid). Sharpe: 0.86 (upper mid). Sharpe: 0.90 (upper mid). Sharpe: 0.48 (lower mid). Sharpe: 1.01 (top quartile). Sharpe: 0.42 (bottom quartile). Sharpe: 0.86 (upper mid). Sharpe: 0.34 (bottom quartile). Sharpe: 0.42 (bottom quartile). Sharpe: 0.95 (top quartile). Point 10 Information ratio: -0.10 (upper mid). Information ratio: 0.00 (top quartile). Information ratio: 0.00 (top quartile). Information ratio: -0.58 (lower mid). Information ratio: -0.31 (lower mid). Information ratio: -0.71 (bottom quartile). Information ratio: -0.64 (bottom quartile). Information ratio: 0.00 (upper mid). Information ratio: -0.99 (bottom quartile). Information ratio: 0.00 (upper mid). Nippon India Small Cap Fund
HDFC Small Cap Fund
DSP Small Cap Fund
Franklin India Smaller Companies Fund
Sundaram Small Cap Fund
IDBI 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 To provide long-term capital appreciation by investing predominantly in Small-Cap and Mid-Cap companies. Research Highlights for HDFC Small Cap Fund Below is the key information for HDFC 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 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 (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 1. Nippon India Small Cap Fund
Nippon India Small Cap Fund
Growth Launch Date 16 Sep 10 NAV (27 Mar 26) ₹150.112 ↓ -2.98 (-1.95 %) Net Assets (Cr) ₹67,642 on 28 Feb 26 Category Equity - Small Cap AMC Nippon Life Asset Management Ltd. Rating ☆☆☆☆ Risk Moderately High Expense Ratio 1.44 Sharpe Ratio 0.76 Information Ratio -0.1 Alpha Ratio 2.58 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 28 Feb 21 ₹10,000 28 Feb 22 ₹14,089 28 Feb 23 ₹15,925 29 Feb 24 ₹25,045 28 Feb 25 ₹24,507 28 Feb 26 ₹28,493 Returns for Nippon India Small Cap Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 27 Mar 26 Duration Returns 1 Month -7.4% 3 Month -9.5% 6 Month -9.7% 1 Year 0.1% 3 Year 19.1% 5 Year 21% 10 Year 15 Year Since launch 19.1% Historical performance (Yearly) on absolute basis
Year Returns 2024 -4.7% 2023 26.1% 2022 48.9% 2021 6.5% 2020 74.3% 2019 29.2% 2018 -2.5% 2017 -16.7% 2016 63% 2015 5.6% Fund Manager information for Nippon India Small Cap Fund
Name Since Tenure Samir Rachh 2 Jan 17 9.16 Yr. Kinjal Desai 25 May 18 7.77 Yr. Lokesh Maru 5 Sep 25 0.48 Yr. Divya Sharma 5 Sep 25 0.48 Yr. Data below for Nippon India Small Cap Fund as on 28 Feb 26
Equity Sector Allocation
Sector Value Industrials 22.16% Financial Services 16.26% Consumer Cyclical 14.31% Basic Materials 11.01% Consumer Defensive 10.23% Health Care 9.43% Technology 6.37% Utility 3.2% Communication Services 1.06% Energy 0.99% Real Estate 0.89% Asset Allocation
Asset Class Value Cash 4.09% Equity 95.91% Top Securities Holdings / Portfolio
Name Holding Value Quantity Multi Commodity Exchange of India Ltd (Financial Services)
Equity, Since 28 Feb 21 | MCX3% ₹1,955 Cr 8,000,000
↓ -778,789 HDFC Bank Ltd (Financial Services)
Equity, Since 30 Apr 22 | HDFCBANK2% ₹1,358 Cr 15,300,000 Karur Vysya Bank Ltd (Financial Services)
Equity, Since 28 Feb 17 | KARURVYSYA2% ₹1,041 Cr 31,907,252
↓ -4,006,259 Apar Industries Ltd (Industrials)
Equity, Since 31 Mar 17 | APARINDS1% ₹983 Cr 879,502 State Bank of India (Financial Services)
Equity, Since 31 Oct 19 | SBIN1% ₹961 Cr 8,000,000
↓ -2,347,848 TD Power Systems Ltd (Industrials)
Equity, Since 31 Dec 15 | TDPOWERSYS1% ₹881 Cr 9,753,276
↓ -424,968 Axis Bank Ltd (Financial Services)
Equity, Since 31 Jul 24 | AXISBANK1% ₹827 Cr 5,977,976 Bharat Heavy Electricals Ltd (Industrials)
Equity, Since 30 Sep 22 | BHEL1% ₹782 Cr 29,507,422 Emami Ltd (Consumer Defensive)
Equity, Since 31 Jul 23 | EMAMILTD1% ₹766 Cr 16,560,721
↑ 612,419 Kirloskar Brothers Ltd (Industrials)
Equity, Since 31 Oct 12 | KIRLOSBROS1% ₹716 Cr 4,525,148
↑ 53,018 2. HDFC Small Cap Fund
HDFC Small Cap Fund
Growth Launch Date 3 Apr 08 NAV (27 Mar 26) ₹121.413 ↓ -2.36 (-1.91 %) Net Assets (Cr) ₹37,424 on 28 Feb 26 Category Equity - Small Cap AMC HDFC Asset Management Company Limited Rating ☆☆☆☆ Risk Moderately High Expense Ratio 1.58 Sharpe Ratio 0.86 Information Ratio 0 Alpha Ratio 0 Min Investment 5,000 Min SIP Investment 300 Exit Load 0-1 Years (1%),1 Years and above(NIL) Growth of 10,000 investment over the years.
Date Value 28 Feb 21 ₹10,000 28 Feb 22 ₹13,233 28 Feb 23 ₹15,045 29 Feb 24 ₹23,066 28 Feb 25 ₹21,746 28 Feb 26 ₹25,584 Returns for HDFC Small Cap Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 27 Mar 26 Duration Returns 1 Month -9.3% 3 Month -12.1% 6 Month -13.6% 1 Year -0.2% 3 Year 15.9% 5 Year 18.6% 10 Year 15 Year Since launch 14.9% Historical performance (Yearly) on absolute basis
Year Returns 2024 -0.6% 2023 20.4% 2022 44.8% 2021 4.6% 2020 64.9% 2019 20.2% 2018 -9.5% 2017 -8.1% 2016 60.8% 2015 5.4% Fund Manager information for HDFC Small Cap Fund
Name Since Tenure Chirag Setalvad 28 Jun 14 11.68 Yr. Dhruv Muchhal 22 Jun 23 2.69 Yr. Data below for HDFC Small Cap Fund as on 28 Feb 26
Equity Sector Allocation
Sector Value Industrials 22.97% Consumer Cyclical 20.17% Financial Services 13.84% Health Care 11.71% Technology 9.89% Basic Materials 7.46% Consumer Defensive 4.29% Communication Services 1.6% Asset Allocation
Asset Class Value Cash 8.07% Equity 91.93% Top Securities Holdings / Portfolio
Name Holding Value Quantity Aster DM Healthcare Ltd Ordinary Shares (Healthcare)
Equity, Since 30 Jun 19 | ASTERDM4% ₹1,575 Cr 24,067,031
↑ 139,897 Bank of Baroda (Financial Services)
Equity, Since 31 Mar 19 | BANKBARODA4% ₹1,508 Cr 46,828,792 Firstsource Solutions Ltd (Technology)
Equity, Since 31 Mar 18 | FSL3% ₹1,197 Cr 56,160,355
↑ 895,993 eClerx Services Ltd (Technology)
Equity, Since 31 Mar 18 | ECLERX3% ₹967 Cr 3,046,989
↑ 45,000 Indian Bank (Financial Services)
Equity, Since 31 Jul 16 | INDIANB3% ₹960 Cr 9,688,128 Gabriel India Ltd (Consumer Cyclical)
Equity, Since 31 Oct 18 | GABRIEL2% ₹928 Cr 9,293,189
↑ 50,000 Eris Lifesciences Ltd Registered Shs (Healthcare)
Equity, Since 31 Jul 23 | ERIS2% ₹897 Cr 6,601,945
↑ 45,294 Fortis Healthcare Ltd (Healthcare)
Equity, Since 31 Jul 23 | FORTIS2% ₹890 Cr 9,440,132 Krishna Institute of Medical Sciences Ltd (Healthcare)
Equity, Since 31 Jul 23 | 5433082% ₹830 Cr 11,133,566
↑ 6,400 Great Eastern Shipping Co Ltd (Industrials)
Equity, Since 31 Jan 15 | GESHIP2% ₹700 Cr 5,229,582 3. DSP Small Cap Fund
DSP Small Cap Fund
Growth Launch Date 14 Jun 07 NAV (27 Mar 26) ₹178.847 ↓ -4.01 (-2.19 %) Net Assets (Cr) ₹16,886 on 28 Feb 26 Category Equity - Small Cap AMC DSP BlackRock Invmt Managers Pvt. Ltd. Rating ☆☆☆☆ Risk Moderately High Expense Ratio 1.72 Sharpe Ratio 0.9 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 28 Feb 21 ₹10,000 28 Feb 22 ₹13,376 28 Feb 23 ₹14,145 29 Feb 24 ₹21,059 28 Feb 25 ₹20,502 28 Feb 26 ₹25,074 Returns for DSP Small Cap Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 27 Mar 26 Duration Returns 1 Month -8.1% 3 Month -8.7% 6 Month -7.4% 1 Year 4.9% 3 Year 18.8% 5 Year 18.1% 10 Year 15 Year Since launch 16.6% Historical performance (Yearly) on absolute basis
Year Returns 2024 -2.8% 2023 25.6% 2022 41.2% 2021 0.5% 2020 58.9% 2019 33.1% 2018 0.7% 2017 -25.5% 2016 42.8% 2015 12.7% Fund Manager information for DSP Small Cap Fund
Name Since Tenure Vinit Sambre 21 Jun 10 15.7 Yr. Data below for DSP Small Cap Fund as on 28 Feb 26
Equity Sector Allocation
Sector Value Consumer Cyclical 35.11% Basic Materials 16.07% Industrials 15.8% Health Care 9.68% Financial Services 7.83% Consumer Defensive 7.13% Technology 2.43% Communication Services 0.5% Utility 0.11% Asset Allocation
Asset Class Value Cash 5.33% Equity 94.67% Top Securities Holdings / Portfolio
Name Holding Value Quantity Lumax Auto Technologies Ltd (Consumer Cyclical)
Equity, Since 30 Jun 18 | LUMAXTECH6% ₹1,089 Cr 6,196,634 Thangamayil Jewellery Ltd (Consumer Cyclical)
Equity, Since 30 Nov 21 | THANGAMAYL4% ₹664 Cr 1,677,908 Kirloskar Oil Engines Ltd (Industrials)
Equity, Since 31 Mar 23 | KIRLOSENG3% ₹548 Cr 3,936,792
↓ -63,208 Welspun Corp Ltd (Basic Materials)
Equity, Since 31 Mar 21 | WELCORP3% ₹454 Cr 5,500,000 Dodla Dairy Ltd (Consumer Defensive)
Equity, Since 30 Jun 21 | 5433063% ₹438 Cr 3,750,000 Sansera Engineering Ltd (Consumer Cyclical)
Equity, Since 30 Jun 24 | 5433582% ₹415 Cr 1,770,029 Jubilant Ingrevia Ltd Ordinary Shares (Basic Materials)
Equity, Since 31 Dec 22 | JUBLINGREA2% ₹410 Cr 7,000,000 LT Foods Ltd (Consumer Defensive)
Equity, Since 31 Dec 17 | 5327832% ₹402 Cr 10,000,000 Triveni Engineering & Industries Ltd (Consumer Defensive)
Equity, Since 31 Aug 17 | TRIVENI2% ₹363 Cr 9,200,000 eClerx Services Ltd (Technology)
Equity, Since 28 Feb 18 | ECLERX2% ₹351 Cr 1,105,918 4. Franklin India Smaller Companies Fund
Franklin India Smaller Companies Fund
Growth Launch Date 13 Jan 06 NAV (27 Mar 26) ₹148.755 ↓ -2.41 (-1.60 %) Net Assets (Cr) ₹12,934 on 28 Feb 26 Category Equity - Small Cap AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd Rating ☆☆☆☆ Risk Moderately High Expense Ratio 1.72 Sharpe Ratio 0.48 Information Ratio -0.58 Alpha Ratio -0.83 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 28 Feb 21 ₹10,000 28 Feb 22 ₹12,900 28 Feb 23 ₹14,491 29 Feb 24 ₹22,639 28 Feb 25 ₹21,539 28 Feb 26 ₹24,128 Returns for Franklin India Smaller Companies Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 27 Mar 26 Duration Returns 1 Month -7.3% 3 Month -9.8% 6 Month -10.3% 1 Year -2% 3 Year 16.5% 5 Year 17.6% 10 Year 15 Year Since launch 14.3% Historical performance (Yearly) on absolute basis
Year Returns 2024 -8.4% 2023 23.2% 2022 52.1% 2021 3.6% 2020 56.4% 2019 18.7% 2018 -5% 2017 -17.4% 2016 43.5% 2015 10.2% Fund Manager information for Franklin India Smaller Companies Fund
Name Since Tenure R. Janakiraman 1 Feb 11 15.09 Yr. Sandeep Manam 18 Oct 21 4.37 Yr. Akhil Kalluri 8 Sep 22 3.48 Yr. Data below for Franklin India Smaller Companies Fund as on 28 Feb 26
Equity Sector Allocation
Sector Value Consumer Cyclical 18.2% Financial Services 18.2% Industrials 18.18% Basic Materials 10.17% Health Care 9.95% Technology 8.1% Real Estate 3.71% Consumer Defensive 3.44% Utility 3.41% Asset Allocation
Asset Class Value Cash 6.65% Equity 93.35% Top Securities Holdings / Portfolio
Name Holding Value Quantity Syrma SGS Technology Ltd (Technology)
Equity, Since 31 Aug 22 | SYRMA2% ₹320 Cr 3,895,864 Equitas Small Finance Bank Ltd Ordinary Shares (Financial Services)
Equity, Since 31 Oct 20 | EQUITASBNK2% ₹309 Cr 48,064,081 Aster DM Healthcare Ltd Ordinary Shares (Healthcare)
Equity, Since 31 Jul 23 | ASTERDM2% ₹306 Cr 4,675,704 Brigade Enterprises Ltd (Real Estate)
Equity, Since 30 Jun 14 | BRIGADE2% ₹269 Cr 3,868,691 CCL Products (India) Ltd (Consumer Defensive)
Equity, Since 30 Apr 19 | CCL2% ₹266 Cr 2,616,654
↓ -393,625 Kirloskar Oil Engines Ltd (Industrials)
Equity, Since 30 Nov 22 | KIRLOSENG2% ₹258 Cr 1,850,935
↓ -250,000 Eris Lifesciences Ltd Registered Shs (Healthcare)
Equity, Since 30 Sep 19 | ERIS2% ₹254 Cr 1,866,828 Kajaria Ceramics Ltd (Industrials)
Equity, Since 30 Apr 25 | KAJARIACER2% ₹239 Cr 2,499,656
↑ 400,000 DCB Bank Ltd (Financial Services)
Equity, Since 31 May 18 | DCBBANK2% ₹226 Cr 12,199,095 Deepak Nitrite Ltd (Basic Materials)
Equity, Since 31 Jan 16 | DEEPAKNTR2% ₹219 Cr 1,387,967 5. Sundaram Small Cap Fund
Sundaram Small Cap Fund
Growth Launch Date 15 Feb 05 NAV (27 Mar 26) ₹230.784 ↓ -4.13 (-1.76 %) Net Assets (Cr) ₹3,306 on 28 Feb 26 Category Equity - Small Cap AMC Sundaram Asset Management Company Ltd Rating ☆☆☆ Risk Moderately High Expense Ratio 1.94 Sharpe Ratio 1.01 Information Ratio -0.31 Alpha Ratio 6.09 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 28 Feb 21 ₹10,000 28 Feb 22 ₹13,411 28 Feb 23 ₹14,148 29 Feb 24 ₹21,580 28 Feb 25 ₹20,330 28 Feb 26 ₹24,434 Returns for Sundaram Small Cap Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 27 Mar 26 Duration Returns 1 Month -8.4% 3 Month -10.8% 6 Month -9.6% 1 Year 2.9% 3 Year 17.4% 5 Year 17.2% 10 Year 15 Year Since launch 16% Historical performance (Yearly) on absolute basis
Year Returns 2024 0.4% 2023 19.1% 2022 45.3% 2021 -2.1% 2020 60.3% 2019 26.2% 2018 -6.1% 2017 -29.2% 2016 55.6% 2015 -0.1% Fund Manager information for Sundaram Small Cap Fund
Name Since Tenure Rohit Seksaria 1 Nov 22 3.33 Yr. Data below for Sundaram Small Cap Fund as on 28 Feb 26
Equity Sector Allocation
Sector Value Consumer Cyclical 21.38% Industrials 18.92% Financial Services 18.89% Health Care 11.68% Basic Materials 8.86% Communication Services 4.43% Technology 3.77% Consumer Defensive 2.63% Real Estate 2.09% Utility 1.14% Asset Allocation
Asset Class Value Cash 6.01% Equity 93.77% Debt 0.22% Other 0% Top Securities Holdings / Portfolio
Name Holding Value Quantity MTAR Technologies Ltd (Industrials)
Equity, Since 31 Dec 24 | MTARTECH4% ₹134 Cr 352,589
↓ -77,711 Aster DM Healthcare Ltd Ordinary Shares (Healthcare)
Equity, Since 30 Nov 23 | ASTERDM3% ₹110 Cr 1,681,362 SJS Enterprises Ltd (Consumer Cyclical)
Equity, Since 31 Aug 23 | 5433873% ₹102 Cr 577,256 E I D Parry India Ltd (Basic Materials)
Equity, Since 31 Jul 24 | EIDPARRY3% ₹87 Cr 1,006,386
↑ 19,175 DCB Bank Ltd (Financial Services)
Equity, Since 30 Sep 24 | DCBBANK2% ₹82 Cr 4,443,809 PNB Housing Finance Ltd (Financial Services)
Equity, Since 31 Jul 24 | PNBHOUSING2% ₹82 Cr 992,680 Safari Industries (India) Ltd (Consumer Cyclical)
Equity, Since 28 Feb 21 | 5230252% ₹81 Cr 451,011
↑ 19,090 Craftsman Automation Ltd (Consumer Cyclical)
Equity, Since 30 Jun 24 | CRAFTSMAN2% ₹80 Cr 106,539
↓ -25,549 Rategain Travel Technologies Ltd (Technology)
Equity, Since 30 Jun 23 | 5434172% ₹79 Cr 1,501,698
↑ 67,177 Affle 3i Ltd (Communication Services)
Equity, Since 31 May 21 | AFFLE2% ₹78 Cr 569,645
↑ 58
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