Top Mid & Small Cap Funds Rated by FINCASH for 2025 - 2026

Updated on September 7, 2025 , 3288 views

Mid cap and Small cap funds have gained huge attention in the past few years. Due to their potential of fast business growth, many investors have been taking a keen interest in Investing in these funds. Mid & small cap funds are a type of equity fund that invests in stocks of companies that have a potential to be the future leaders. mid cap funds invest in companies that have a Market cap of INR 500 Cr to INR 1000 Cr, whereas, small caps are typically defined as firms with a market cap of around INR 500 Crore. These companies are more flexible in adapting changes than the larger companies, hence they can show rapid growth.

Many mid and small cap companies respond faster to innovations and changes in the market as they tend to be more focused and specialised in their niche. They also serve emerging industries with the potential for substantial future growth. Thus, these companies have the potential to generate good returns.

But both mid and small cap companies are volatile in nature. These are riskier than the Large cap funds. These funds are capable of delivering exceptional returns in a bull market phase, but at the same time, the stock of these companies can suffer badly during a bearish market cycle. Investors can invest in these funds to diversify their Portfolio, but for good returns, it is advised to stay invested for minimum 5 years. Some of the best performing mid & small cap funds that can deliver promising returns are listed below.

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Top Performing Mid & Small Cap Funds

Fund	NAV	Net Assets (Cr)	Rating	3 MO (%)	6 MO (%)	1 YR (%)	3 YR (%)	5 YR (%)	2024 (%)	Information Ratio	Sharpe Ratio
Aditya Birla Sun Life Small Cap Fund Growth	₹84.646 ↑ 0.07	₹5,011	☆☆☆☆☆	-2.4	15.9	-5.4	16.5	24.4	21.5	0	-0.43
Kotak Emerging Equity Scheme Growth	₹135.985 ↑ 0.20	₹57,375	☆☆☆☆	1.8	20.4	2.4	20.1	28.2	33.6	-0.29	-0.09
HDFC Small Cap Fund Growth	₹142.031 ↑ 0.70	₹36,353	☆☆☆☆	2.7	19.5	0.8	22.4	31.2	20.4	0	-0.17
Sundaram Mid Cap Fund Growth	₹1,384.48 ↑ 2.01	₹12,596	☆☆☆☆	0	17.8	0.4	21.5	26.8	32	0	-0.17
Nippon India Small Cap Fund Growth	₹168.489 ↑ 0.50	₹65,922	☆☆☆☆	-1.1	15.1	-5.7	22	33.2	26.1	0	-0.51
Franklin India Smaller Companies Fund Growth	₹168.78 ↑ 0.16	₹13,825	☆☆☆☆	-3.5	13.7	-8.8	21.2	30.1	23.2	-0.06	-0.59
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 9 Sep 25
Note: Ratio's shown as on 31 Jul 25

Research Highlights & Commentary of 6 Funds showcased

Commentary	Aditya Birla Sun Life Small Cap Fund	Kotak Emerging Equity Scheme	HDFC Small Cap Fund	Sundaram Mid Cap Fund	Nippon India Small Cap Fund	Franklin India Smaller Companies Fund
Point 1	Bottom quartile AUM (₹5,011 Cr).	Upper mid AUM (₹57,375 Cr).	Upper mid AUM (₹36,353 Cr).	Bottom quartile AUM (₹12,596 Cr).	Highest AUM (₹65,922 Cr).	Lower mid AUM (₹13,825 Cr).
Point 2	Established history (18+ yrs).	Established history (18+ yrs).	Established history (17+ yrs).	Oldest track record among peers (23 yrs).	Established history (14+ yrs).	Established history (19+ yrs).
Point 3	Top rated.	Rating: 4★ (upper mid).	Rating: 4★ (upper mid).	Rating: 4★ (lower mid).	Rating: 4★ (bottom quartile).	Rating: 4★ (bottom 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.
Point 5	5Y return: 24.40% (bottom quartile).	5Y return: 28.16% (lower mid).	5Y return: 31.16% (upper mid).	5Y return: 26.83% (bottom quartile).	5Y return: 33.17% (top quartile).	5Y return: 30.09% (upper mid).
Point 6	3Y return: 16.50% (bottom quartile).	3Y return: 20.14% (bottom quartile).	3Y return: 22.39% (top quartile).	3Y return: 21.51% (upper mid).	3Y return: 22.02% (upper mid).	3Y return: 21.17% (lower mid).
Point 7	1Y return: -5.35% (lower mid).	1Y return: 2.37% (top quartile).	1Y return: 0.81% (upper mid).	1Y return: 0.36% (upper mid).	1Y return: -5.74% (bottom quartile).	1Y return: -8.82% (bottom quartile).
Point 8	Alpha: 0.00 (upper mid).	Alpha: 4.96 (top quartile).	Alpha: 0.00 (lower mid).	Alpha: 3.17 (upper mid).	Alpha: -3.84 (bottom quartile).	Alpha: -5.51 (bottom quartile).
Point 9	Sharpe: -0.43 (lower mid).	Sharpe: -0.09 (top quartile).	Sharpe: -0.17 (upper mid).	Sharpe: -0.17 (upper mid).	Sharpe: -0.51 (bottom quartile).	Sharpe: -0.59 (bottom quartile).
Point 10	Information ratio: 0.00 (top quartile).	Information ratio: -0.29 (bottom quartile).	Information ratio: 0.00 (upper mid).	Information ratio: 0.00 (upper mid).	Information ratio: 0.00 (lower mid).	Information ratio: -0.06 (bottom quartile).

Aditya Birla Sun Life Small Cap Fund

Bottom quartile AUM (₹5,011 Cr).
Established history (18+ yrs).
Top rated.
Risk profile: Moderately High.
5Y return: 24.40% (bottom quartile).
3Y return: 16.50% (bottom quartile).
1Y return: -5.35% (lower mid).
Alpha: 0.00 (upper mid).
Sharpe: -0.43 (lower mid).
Information ratio: 0.00 (top quartile).

Kotak Emerging Equity Scheme

Upper mid AUM (₹57,375 Cr).
Established history (18+ yrs).
Rating: 4★ (upper mid).
Risk profile: Moderately High.
5Y return: 28.16% (lower mid).
3Y return: 20.14% (bottom quartile).
1Y return: 2.37% (top quartile).
Alpha: 4.96 (top quartile).
Sharpe: -0.09 (top quartile).
Information ratio: -0.29 (bottom quartile).

HDFC Small Cap Fund

Upper mid AUM (₹36,353 Cr).
Established history (17+ yrs).
Rating: 4★ (upper mid).
Risk profile: Moderately High.
5Y return: 31.16% (upper mid).
3Y return: 22.39% (top quartile).
1Y return: 0.81% (upper mid).
Alpha: 0.00 (lower mid).
Sharpe: -0.17 (upper mid).
Information ratio: 0.00 (upper mid).

Sundaram Mid Cap Fund

Bottom quartile AUM (₹12,596 Cr).
Oldest track record among peers (23 yrs).
Rating: 4★ (lower mid).
Risk profile: Moderately High.
5Y return: 26.83% (bottom quartile).
3Y return: 21.51% (upper mid).
1Y return: 0.36% (upper mid).
Alpha: 3.17 (upper mid).
Sharpe: -0.17 (upper mid).
Information ratio: 0.00 (upper mid).

Nippon India Small Cap Fund

Highest AUM (₹65,922 Cr).
Established history (14+ yrs).
Rating: 4★ (bottom quartile).
Risk profile: Moderately High.
5Y return: 33.17% (top quartile).
3Y return: 22.02% (upper mid).
1Y return: -5.74% (bottom quartile).
Alpha: -3.84 (bottom quartile).
Sharpe: -0.51 (bottom quartile).
Information ratio: 0.00 (lower mid).

Franklin India Smaller Companies Fund

Lower mid AUM (₹13,825 Cr).
Established history (19+ yrs).
Rating: 4★ (bottom quartile).
Risk profile: Moderately High.
5Y return: 30.09% (upper mid).
3Y return: 21.17% (lower mid).
1Y return: -8.82% (bottom quartile).
Alpha: -5.51 (bottom quartile).
Sharpe: -0.59 (bottom quartile).
Information ratio: -0.06 (bottom quartile).

Why Are These Top Performers?

Fincash has employed the following parameters for shortlisting the top performing funds:

Past Returns: Return analysis of last 3 years
Parameters & Weights: Information ratio with some modifications for our ratings and rankings
Qualitative & Quantitative Analysis: Quantitative measures like Expense Ratio, Sharpe Ratio, Sortino Ratio, Alpa, Beta, Upside Capture Ratio & Downside Capture Ratio, including fund age and the size of the fund has been considered. Qualitative analysis like the reputation of the fund along with the fund manager is one of the important parameters that you would see in the listed funds.
Asset Size: The minimum AUM criteria for Equity Funds are INR 100 Crores with some exceptions at times for new funds that are doing well in the market.
Performance with Respect to Benchmark: Peer average

Smart Tips to Invest in Mid & Small Cap Funds

Some of the important tips to consider while investing in mid and small cap funds are:

Investment Tenure: Investors planning to invest in Diversified Funds should stay invested for minimum 5 years.
Invest via a SIP: SIP or Systematic Investment plan is the most efficient way to invest in a Mutual Fund. They not only provide a systematic way of investing, but also ensures regular investment growth. Also, due to their investment style, they can prevent the pitfalls of equity investments. You can invest in a SIP with an amount as low as INR 500.

Disclaimer:
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.