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Small-Cap Mutual Fund Myths Busted: Facts Every Investor Must Know in 2025

Updated on September 26, 2025 , 31 views

Small-cap Mutual Funds often attract attention for their high-return potential, but they’re also misunderstood and misrepresented. This long-form article dives deep into three major myths around Small cap funds using data, logic, and clarity.

Myth 1: Small-Cap Funds Are Always Riskier Than Large-Caps

While it’s true that small-cap funds exhibit higher Volatility, assuming they’re always riskier than Large cap funds can be misleading.

✅ Reality Check:

Volatility ≠ Permanent Loss. Short-term fluctuations do not always translate to long-term losses.

According to data from Value Research and Morningstar (as of 2023), small-cap funds have had longer periods of underperformance, but when the cycle turns, they often outperform large-caps by a wide margin.

  • Example: During 2018-2020, small-cap funds were down by an average of 20%, but between 2020 and 2022, they rallied over 100% in many cases.

Takeaway:

Small-cap funds are cyclical and tend to outperform over the long term if one has the patience to ride out volatility. Risk is not just about price movement—it’s about behaviour during those phases.

Myth 2: Small-Cap Funds Are for Aggressive Investors Only

Many believe that only high-risk investors should consider small-cap funds.

✅ Reality Check:

If the goal is long-term—say 7+ years—even a moderate investor can benefit by allocating 10-20% of their Portfolio to small-cap funds.

SIPs in small-caps help average out volatility and make the journey smoother.

  • Use Case: Someone saving for their child’s education 10 years away can include small-cap funds for better compounding if they follow disciplined SIPs.

Takeaway:

It’s about time horizon and discipline, not just risk appetite. Anyone with a longer goal and the right mindset can benefit.

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Myth 3: All Small-Caps Give Higher Returns Than Large-Caps

There’s a common assumption that small-cap funds are guaranteed to outperform.

✅ Reality Check:

Over the past 10 years (as per AMFI data till 2023), top large-cap funds have delivered CAGR of 12-14%, while top small-cap funds ranged between 14-18%—only slightly higher, not exponentially.

Poor quality small-cap stocks can ruin portfolios. It’s not about Market cap, it’s about fundamentals and fund manager expertise.

  • Insight: Blindly chasing “higher returns” without understanding the fund strategy, stock selection, or quality can be dangerous.

Takeaway:

Outperformance is possible—but not guaranteed. Look at consistency, quality, and how the fund behaves in downturns.

Final Advice for Small-Cap SIP Investors

  • Don’t enter just because of past performance
  • Stay for 5-7+ years to see the compounding effect
  • Choose funds with experienced fund managers and process-driven Investing
  • Don’t panic during dips—use them to add more if your goals haven’t changed

Top 10 Best Small Cap Funds to Invest in FY 25 - 26

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)5 YR (%)2024 (%)
Nippon India Small Cap Fund Growth ₹166.28
↓ -2.82
₹64,821-2.911.3-8.623.432.226.1
HDFC Small Cap Fund Growth ₹140.46
↓ -2.36
₹36,2941.117.3-1.223.930.320.4
Franklin India Smaller Companies Fund Growth ₹165.805
↓ -3.09
₹13,302-4.79.7-10.821.928.823.2
ICICI Prudential Smallcap Fund Growth ₹86.9
↓ -0.98
₹8,441-0.913.1-5.918.12815.6
IDBI Small Cap Fund Growth ₹30.049
↓ -0.62
₹604-0.88.7-111827.840
Sundaram Small Cap Fund Growth ₹255.408
↓ -4.78
₹3,282-1.114.7-5.620.527.719.1
DSP Small Cap Fund  Growth ₹193.059
↓ -3.65
₹16,628-3.314.4-4.920.127.125.6
Kotak Small Cap Fund Growth ₹254.848
↓ -4.85
₹17,508-3.78.9-11.616.226.825.5
SBI Small Cap Fund Growth ₹169.342
↓ -2.84
₹35,245-1.88.1-9.41524.224.1
Aditya Birla Sun Life Small Cap Fund Growth ₹83.2535
↓ -1.63
₹4,824-4.211.2-1017.522.921.5
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 26 Sep 25

Research Highlights & Commentary of 10 Funds showcased

CommentaryNippon India Small Cap FundHDFC Small Cap FundFranklin India Smaller Companies FundICICI Prudential Smallcap FundIDBI Small Cap FundSundaram Small Cap FundDSP Small Cap Fund Kotak Small Cap FundSBI Small Cap FundAditya Birla Sun Life Small Cap Fund
Point 1Highest AUM (₹64,821 Cr).Top quartile AUM (₹36,294 Cr).Lower mid AUM (₹13,302 Cr).Lower mid AUM (₹8,441 Cr).Bottom quartile AUM (₹604 Cr).Bottom quartile AUM (₹3,282 Cr).Upper mid AUM (₹16,628 Cr).Upper mid AUM (₹17,508 Cr).Upper mid AUM (₹35,245 Cr).Bottom quartile AUM (₹4,824 Cr).
Point 2Established history (15+ yrs).Established history (17+ yrs).Established history (19+ yrs).Established history (17+ yrs).Established history (8+ yrs).Oldest track record among peers (20 yrs).Established history (18+ yrs).Established history (20+ yrs).Established history (16+ yrs).Established history (18+ yrs).
Point 3Rating: 4★ (upper mid).Rating: 4★ (upper mid).Rating: 4★ (upper mid).Rating: 3★ (lower mid).Not Rated.Rating: 3★ (bottom quartile).Rating: 4★ (lower mid).Rating: 3★ (bottom quartile).Top rated.Rating: 5★ (top quartile).
Point 4Risk 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 55Y return: 32.24% (top quartile).5Y return: 30.32% (top quartile).5Y return: 28.80% (upper mid).5Y return: 27.98% (upper mid).5Y return: 27.78% (upper mid).5Y return: 27.72% (lower mid).5Y return: 27.11% (lower mid).5Y return: 26.77% (bottom quartile).5Y return: 24.21% (bottom quartile).5Y return: 22.94% (bottom quartile).
Point 63Y return: 23.36% (top quartile).3Y return: 23.90% (top quartile).3Y return: 21.94% (upper mid).3Y return: 18.07% (lower mid).3Y return: 18.02% (lower mid).3Y return: 20.52% (upper mid).3Y return: 20.09% (upper mid).3Y return: 16.15% (bottom quartile).3Y return: 15.05% (bottom quartile).3Y return: 17.51% (bottom quartile).
Point 71Y return: -8.58% (upper mid).1Y return: -1.19% (top quartile).1Y return: -10.85% (bottom quartile).1Y return: -5.86% (upper mid).1Y return: -11.04% (bottom quartile).1Y return: -5.56% (upper mid).1Y return: -4.93% (top quartile).1Y return: -11.60% (bottom quartile).1Y return: -9.40% (lower mid).1Y return: -9.95% (lower mid).
Point 8Alpha: -2.55 (bottom quartile).Alpha: 0.00 (upper mid).Alpha: -5.08 (bottom quartile).Alpha: 0.15 (top quartile).Alpha: -4.61 (bottom quartile).Alpha: 0.97 (top quartile).Alpha: 0.00 (upper mid).Alpha: -1.53 (lower mid).Alpha: 0.00 (upper mid).Alpha: 0.00 (lower mid).
Point 9Sharpe: -0.65 (lower mid).Sharpe: -0.33 (top quartile).Sharpe: -0.76 (bottom quartile).Sharpe: -0.49 (upper mid).Sharpe: -0.70 (bottom quartile).Sharpe: -0.47 (upper mid).Sharpe: -0.30 (top quartile).Sharpe: -0.59 (lower mid).Sharpe: -0.72 (bottom quartile).Sharpe: -0.56 (upper mid).
Point 10Information ratio: 0.10 (top quartile).Information ratio: 0.00 (upper mid).Information ratio: 0.02 (top quartile).Information ratio: -0.58 (bottom quartile).Information ratio: -0.82 (bottom quartile).Information ratio: -0.47 (lower mid).Information ratio: 0.00 (upper mid).Information ratio: -0.92 (bottom quartile).Information ratio: 0.00 (upper mid).Information ratio: 0.00 (lower mid).

Nippon India Small Cap Fund

  • Highest AUM (₹64,821 Cr).
  • Established history (15+ yrs).
  • Rating: 4★ (upper mid).
  • Risk profile: Moderately High.
  • 5Y return: 32.24% (top quartile).
  • 3Y return: 23.36% (top quartile).
  • 1Y return: -8.58% (upper mid).
  • Alpha: -2.55 (bottom quartile).
  • Sharpe: -0.65 (lower mid).
  • Information ratio: 0.10 (top quartile).

HDFC Small Cap Fund

  • Top quartile AUM (₹36,294 Cr).
  • Established history (17+ yrs).
  • Rating: 4★ (upper mid).
  • Risk profile: Moderately High.
  • 5Y return: 30.32% (top quartile).
  • 3Y return: 23.90% (top quartile).
  • 1Y return: -1.19% (top quartile).
  • Alpha: 0.00 (upper mid).
  • Sharpe: -0.33 (top quartile).
  • Information ratio: 0.00 (upper mid).

Franklin India Smaller Companies Fund

  • Lower mid AUM (₹13,302 Cr).
  • Established history (19+ yrs).
  • Rating: 4★ (upper mid).
  • Risk profile: Moderately High.
  • 5Y return: 28.80% (upper mid).
  • 3Y return: 21.94% (upper mid).
  • 1Y return: -10.85% (bottom quartile).
  • Alpha: -5.08 (bottom quartile).
  • Sharpe: -0.76 (bottom quartile).
  • Information ratio: 0.02 (top quartile).

ICICI Prudential Smallcap Fund

  • Lower mid AUM (₹8,441 Cr).
  • Established history (17+ yrs).
  • Rating: 3★ (lower mid).
  • Risk profile: Moderately High.
  • 5Y return: 27.98% (upper mid).
  • 3Y return: 18.07% (lower mid).
  • 1Y return: -5.86% (upper mid).
  • Alpha: 0.15 (top quartile).
  • Sharpe: -0.49 (upper mid).
  • Information ratio: -0.58 (bottom quartile).

IDBI Small Cap Fund

  • Bottom quartile AUM (₹604 Cr).
  • Established history (8+ yrs).
  • Not Rated.
  • Risk profile: Moderately High.
  • 5Y return: 27.78% (upper mid).
  • 3Y return: 18.02% (lower mid).
  • 1Y return: -11.04% (bottom quartile).
  • Alpha: -4.61 (bottom quartile).
  • Sharpe: -0.70 (bottom quartile).
  • Information ratio: -0.82 (bottom quartile).

Sundaram Small Cap Fund

  • Bottom quartile AUM (₹3,282 Cr).
  • Oldest track record among peers (20 yrs).
  • Rating: 3★ (bottom quartile).
  • Risk profile: Moderately High.
  • 5Y return: 27.72% (lower mid).
  • 3Y return: 20.52% (upper mid).
  • 1Y return: -5.56% (upper mid).
  • Alpha: 0.97 (top quartile).
  • Sharpe: -0.47 (upper mid).
  • Information ratio: -0.47 (lower mid).

DSP Small Cap Fund 

  • Upper mid AUM (₹16,628 Cr).
  • Established history (18+ yrs).
  • Rating: 4★ (lower mid).
  • Risk profile: Moderately High.
  • 5Y return: 27.11% (lower mid).
  • 3Y return: 20.09% (upper mid).
  • 1Y return: -4.93% (top quartile).
  • Alpha: 0.00 (upper mid).
  • Sharpe: -0.30 (top quartile).
  • Information ratio: 0.00 (upper mid).

Kotak Small Cap Fund

  • Upper mid AUM (₹17,508 Cr).
  • Established history (20+ yrs).
  • Rating: 3★ (bottom quartile).
  • Risk profile: Moderately High.
  • 5Y return: 26.77% (bottom quartile).
  • 3Y return: 16.15% (bottom quartile).
  • 1Y return: -11.60% (bottom quartile).
  • Alpha: -1.53 (lower mid).
  • Sharpe: -0.59 (lower mid).
  • Information ratio: -0.92 (bottom quartile).

SBI Small Cap Fund

  • Upper mid AUM (₹35,245 Cr).
  • Established history (16+ yrs).
  • Top rated.
  • Risk profile: Moderately High.
  • 5Y return: 24.21% (bottom quartile).
  • 3Y return: 15.05% (bottom quartile).
  • 1Y return: -9.40% (lower mid).
  • Alpha: 0.00 (upper mid).
  • Sharpe: -0.72 (bottom quartile).
  • Information ratio: 0.00 (upper mid).

Aditya Birla Sun Life Small Cap Fund

  • Bottom quartile AUM (₹4,824 Cr).
  • Established history (18+ yrs).
  • Rating: 5★ (top quartile).
  • Risk profile: Moderately High.
  • 5Y return: 22.94% (bottom quartile).
  • 3Y return: 17.51% (bottom quartile).
  • 1Y return: -9.95% (lower mid).
  • Alpha: 0.00 (lower mid).
  • Sharpe: -0.56 (upper mid).
  • Information ratio: 0.00 (lower mid).
*Above is list of Best Small Cap Mutual Funds having Net Assets/ AUM above 100 Crore & Sorted on 5 Year CAGR Returns.

1. Nippon India Small Cap Fund

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.

Research Highlights for Nippon India Small Cap Fund

  • Highest AUM (₹64,821 Cr).
  • Established history (15+ yrs).
  • Rating: 4★ (upper mid).
  • Risk profile: Moderately High.
  • 5Y return: 32.24% (top quartile).
  • 3Y return: 23.36% (top quartile).
  • 1Y return: -8.58% (upper mid).
  • Alpha: -2.55 (bottom quartile).
  • Sharpe: -0.65 (lower mid).
  • Information ratio: 0.10 (top quartile).

Below is the key information for Nippon India Small Cap Fund

Nippon India Small Cap Fund
Growth
Launch Date 16 Sep 10
NAV (26 Sep 25) ₹166.28 ↓ -2.82   (-1.67 %)
Net Assets (Cr) ₹64,821 on 31 Aug 25
Category Equity - Small Cap
AMC Nippon Life Asset Management Ltd.
Rating
Risk Moderately High
Expense Ratio 1.44
Sharpe Ratio -0.65
Information Ratio 0.1
Alpha Ratio -2.55
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.

DateValue

Nippon India Small Cap Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹673,113.
Net Profit of ₹373,113
Invest Now

Returns for Nippon India Small Cap Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 Sep 25

DurationReturns
1 Month 0%
3 Month -2.9%
6 Month 11.3%
1 Year -8.6%
3 Year 23.4%
5 Year 32.2%
10 Year
15 Year
Since launch 20.6%
Historical performance (Yearly) on absolute basis
YearReturns
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%
2015 15.1%
Fund Manager information for Nippon India Small Cap Fund
NameSinceTenure

Data below for Nippon India Small Cap Fund as on 31 Aug 25

Equity Sector Allocation
SectorValue
Asset Allocation
Asset ClassValue
Top Securities Holdings / Portfolio
NameHoldingValueQuantity

2. HDFC Small Cap Fund

To provide long-term capital appreciation by investing predominantly in Small-Cap and Mid-Cap companies.

Research Highlights for HDFC Small Cap Fund

  • Top quartile AUM (₹36,294 Cr).
  • Established history (17+ yrs).
  • Rating: 4★ (upper mid).
  • Risk profile: Moderately High.
  • 5Y return: 30.32% (top quartile).
  • 3Y return: 23.90% (top quartile).
  • 1Y return: -1.19% (top quartile).
  • Alpha: 0.00 (upper mid).
  • Sharpe: -0.33 (top quartile).
  • Information ratio: 0.00 (upper mid).

Below is the key information for HDFC Small Cap Fund

HDFC Small Cap Fund
Growth
Launch Date 3 Apr 08
NAV (26 Sep 25) ₹140.46 ↓ -2.36   (-1.65 %)
Net Assets (Cr) ₹36,294 on 31 Aug 25
Category Equity - Small Cap
AMC HDFC Asset Management Company Limited
Rating
Risk Moderately High
Expense Ratio 1.58
Sharpe Ratio -0.33
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.

DateValue

HDFC Small Cap Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹642,208.
Net Profit of ₹342,208
Invest Now

Returns for HDFC Small Cap Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 Sep 25

DurationReturns
1 Month -0.1%
3 Month 1.1%
6 Month 17.3%
1 Year -1.2%
3 Year 23.9%
5 Year 30.3%
10 Year
15 Year
Since launch 16.3%
Historical performance (Yearly) on absolute basis
YearReturns
2024 20.4%
2023 44.8%
2022 4.6%
2021 64.9%
2020 20.2%
2019 -9.5%
2018 -8.1%
2017 60.8%
2016 5.4%
2015 6.4%
Fund Manager information for HDFC Small Cap Fund
NameSinceTenure

Data below for HDFC Small Cap Fund as on 31 Aug 25

Equity Sector Allocation
SectorValue
Asset Allocation
Asset ClassValue
Top Securities Holdings / Portfolio
NameHoldingValueQuantity

3. Franklin India Smaller Companies Fund

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

  • Lower mid AUM (₹13,302 Cr).
  • Established history (19+ yrs).
  • Rating: 4★ (upper mid).
  • Risk profile: Moderately High.
  • 5Y return: 28.80% (upper mid).
  • 3Y return: 21.94% (upper mid).
  • 1Y return: -10.85% (bottom quartile).
  • Alpha: -5.08 (bottom quartile).
  • Sharpe: -0.76 (bottom quartile).
  • Information ratio: 0.02 (top quartile).

Below is the key information for Franklin India Smaller Companies Fund

Franklin India Smaller Companies Fund
Growth
Launch Date 13 Jan 06
NAV (26 Sep 25) ₹165.805 ↓ -3.09   (-1.83 %)
Net Assets (Cr) ₹13,302 on 31 Aug 25
Category Equity - Small Cap
AMC Franklin Templeton Asst Mgmt(IND)Pvt Ltd
Rating
Risk Moderately High
Expense Ratio 1.72
Sharpe Ratio -0.76
Information Ratio 0.02
Alpha Ratio -5.08
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.

DateValue

Franklin India Smaller Companies Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹612,552.
Net Profit of ₹312,552
Invest Now

Returns for Franklin India Smaller Companies Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 Sep 25

DurationReturns
1 Month -0.8%
3 Month -4.7%
6 Month 9.7%
1 Year -10.8%
3 Year 21.9%
5 Year 28.8%
10 Year
15 Year
Since launch 15.3%
Historical performance (Yearly) on absolute basis
YearReturns
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%
2015 9.6%
Fund Manager information for Franklin India Smaller Companies Fund
NameSinceTenure

Data below for Franklin India Smaller Companies Fund as on 31 Aug 25

Equity Sector Allocation
SectorValue
Asset Allocation
Asset ClassValue
Top Securities Holdings / Portfolio
NameHoldingValueQuantity

4. ICICI Prudential Smallcap Fund

(Erstwhile ICICI Prudential Indo Asia Equity Fund)

ICICI Prudential Indo Asia Equity Fund is an OE equity scheme that seeks to generate long term capital appreciation by investing in equity, equity related securities and or share classes/units of equity funds of companies, which are incorporated or have their area of primary activity, in the Asia Pacific region. Initially the Scheme will invest in share classes of International Opportunities Fund Asian Equity Fund and thereafter the Fund Manager of the Indo Asia Equity Fund may choose to make investment in listed equity shares, securities in the Asia Pacific region. However, there can be no assurance that the investment objective of the Scheme will be realized.

Research Highlights for ICICI Prudential Smallcap Fund

  • Lower mid AUM (₹8,441 Cr).
  • Established history (17+ yrs).
  • Rating: 3★ (lower mid).
  • Risk profile: Moderately High.
  • 5Y return: 27.98% (upper mid).
  • 3Y return: 18.07% (lower mid).
  • 1Y return: -5.86% (upper mid).
  • Alpha: 0.15 (top quartile).
  • Sharpe: -0.49 (upper mid).
  • Information ratio: -0.58 (bottom quartile).

Below is the key information for ICICI Prudential Smallcap Fund

ICICI Prudential Smallcap Fund
Growth
Launch Date 18 Oct 07
NAV (26 Sep 25) ₹86.9 ↓ -0.98   (-1.12 %)
Net Assets (Cr) ₹8,441 on 31 Aug 25
Category Equity - Small Cap
AMC ICICI Prudential Asset Management Company Limited
Rating
Risk Moderately High
Expense Ratio 1.78
Sharpe Ratio -0.49
Information Ratio -0.58
Alpha Ratio 0.15
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.

DateValue

ICICI Prudential Smallcap Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹598,181.
Net Profit of ₹298,181
Invest Now

Returns for ICICI Prudential Smallcap Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 Sep 25

DurationReturns
1 Month -0.3%
3 Month -0.9%
6 Month 13.1%
1 Year -5.9%
3 Year 18.1%
5 Year 28%
10 Year
15 Year
Since launch 12.8%
Historical performance (Yearly) on absolute basis
YearReturns
2024 15.6%
2023 37.9%
2022 5.7%
2021 61%
2020 22.8%
2019 10%
2018 -22.4%
2017 42.7%
2016 6%
2015 0.5%
Fund Manager information for ICICI Prudential Smallcap Fund
NameSinceTenure

Data below for ICICI Prudential Smallcap Fund as on 31 Aug 25

Equity Sector Allocation
SectorValue
Asset Allocation
Asset ClassValue
Top Securities Holdings / Portfolio
NameHoldingValueQuantity

5. IDBI Small Cap Fund

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

  • Bottom quartile AUM (₹604 Cr).
  • Established history (8+ yrs).
  • Not Rated.
  • Risk profile: Moderately High.
  • 5Y return: 27.78% (upper mid).
  • 3Y return: 18.02% (lower mid).
  • 1Y return: -11.04% (bottom quartile).
  • Alpha: -4.61 (bottom quartile).
  • Sharpe: -0.70 (bottom quartile).
  • Information ratio: -0.82 (bottom quartile).

Below is the key information for IDBI Small Cap Fund

IDBI Small Cap Fund
Growth
Launch Date 21 Jun 17
NAV (26 Sep 25) ₹30.049 ↓ -0.62   (-2.02 %)
Net Assets (Cr) ₹604 on 31 Aug 25
Category Equity - Small Cap
AMC IDBI Asset Management Limited
Rating Not Rated
Risk Moderately High
Expense Ratio 2.3
Sharpe Ratio -0.7
Information Ratio -0.82
Alpha Ratio -4.61
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.

DateValue

IDBI Small Cap Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹598,181.
Net Profit of ₹298,181
Invest Now

Returns for IDBI Small Cap Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 Sep 25

DurationReturns
1 Month 1.3%
3 Month -0.8%
6 Month 8.7%
1 Year -11%
3 Year 18%
5 Year 27.8%
10 Year
15 Year
Since launch 14.2%
Historical performance (Yearly) on absolute basis
YearReturns
2024 40%
2023 33.4%
2022 2.4%
2021 64.7%
2020 19%
2019 -4.4%
2018 -15%
2017
2016
2015
Fund Manager information for IDBI Small Cap Fund
NameSinceTenure

Data below for IDBI Small Cap Fund as on 31 Aug 25

Equity Sector Allocation
SectorValue
Asset Allocation
Asset ClassValue
Top Securities Holdings / Portfolio
NameHoldingValueQuantity

6. Sundaram Small Cap Fund

(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

  • Bottom quartile AUM (₹3,282 Cr).
  • Oldest track record among peers (20 yrs).
  • Rating: 3★ (bottom quartile).
  • Risk profile: Moderately High.
  • 5Y return: 27.72% (lower mid).
  • 3Y return: 20.52% (upper mid).
  • 1Y return: -5.56% (upper mid).
  • Alpha: 0.97 (top quartile).
  • Sharpe: -0.47 (upper mid).
  • Information ratio: -0.47 (lower mid).

Below is the key information for Sundaram Small Cap Fund

Sundaram Small Cap Fund
Growth
Launch Date 15 Feb 05
NAV (26 Sep 25) ₹255.408 ↓ -4.78   (-1.84 %)
Net Assets (Cr) ₹3,282 on 31 Aug 25
Category Equity - Small Cap
AMC Sundaram Asset Management Company Ltd
Rating
Risk Moderately High
Expense Ratio 1.94
Sharpe Ratio -0.47
Information Ratio -0.47
Alpha Ratio 0.97
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.

DateValue

Sundaram Small Cap Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹598,181.
Net Profit of ₹298,181
Invest Now

Returns for Sundaram Small Cap Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 Sep 25

DurationReturns
1 Month 0.9%
3 Month -1.1%
6 Month 14.7%
1 Year -5.6%
3 Year 20.5%
5 Year 27.7%
10 Year
15 Year
Since launch 17%
Historical performance (Yearly) on absolute basis
YearReturns
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%
2015 7.8%
Fund Manager information for Sundaram Small Cap Fund
NameSinceTenure

Data below for Sundaram Small Cap Fund as on 31 Aug 25

Equity Sector Allocation
SectorValue
Asset Allocation
Asset ClassValue
Top Securities Holdings / Portfolio
NameHoldingValueQuantity

7. DSP Small Cap Fund 

(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 

  • Upper mid AUM (₹16,628 Cr).
  • Established history (18+ yrs).
  • Rating: 4★ (lower mid).
  • Risk profile: Moderately High.
  • 5Y return: 27.11% (lower mid).
  • 3Y return: 20.09% (upper mid).
  • 1Y return: -4.93% (top quartile).
  • Alpha: 0.00 (upper mid).
  • Sharpe: -0.30 (top quartile).
  • Information ratio: 0.00 (upper mid).

Below is the key information for DSP Small Cap Fund 

DSP Small Cap Fund 
Growth
Launch Date 14 Jun 07
NAV (26 Sep 25) ₹193.059 ↓ -3.65   (-1.86 %)
Net Assets (Cr) ₹16,628 on 31 Aug 25
Category Equity - Small Cap
AMC DSP BlackRock Invmt Managers Pvt. Ltd.
Rating
Risk Moderately High
Expense Ratio 1.72
Sharpe Ratio -0.3
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.

DateValue

DSP Small Cap Fund  SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹598,181.
Net Profit of ₹298,181
Invest Now

Returns for DSP Small Cap Fund 

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 Sep 25

DurationReturns
1 Month -1.3%
3 Month -3.3%
6 Month 14.4%
1 Year -4.9%
3 Year 20.1%
5 Year 27.1%
10 Year
15 Year
Since launch 17.6%
Historical performance (Yearly) on absolute basis
YearReturns
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%
2015 20.4%
Fund Manager information for DSP Small Cap Fund 
NameSinceTenure

Data below for DSP Small Cap Fund  as on 31 Aug 25

Equity Sector Allocation
SectorValue
Asset Allocation
Asset ClassValue
Top Securities Holdings / Portfolio
NameHoldingValueQuantity

8. Kotak Small Cap Fund

(Erstwhile Kotak Midcap Scheme)

The investment objective of the Scheme is to generate capital appreciation from a diversified portfolio of equity and equity related securities.

Research Highlights for Kotak Small Cap Fund

  • Upper mid AUM (₹17,508 Cr).
  • Established history (20+ yrs).
  • Rating: 3★ (bottom quartile).
  • Risk profile: Moderately High.
  • 5Y return: 26.77% (bottom quartile).
  • 3Y return: 16.15% (bottom quartile).
  • 1Y return: -11.60% (bottom quartile).
  • Alpha: -1.53 (lower mid).
  • Sharpe: -0.59 (lower mid).
  • Information ratio: -0.92 (bottom quartile).

Below is the key information for Kotak Small Cap Fund

Kotak Small Cap Fund
Growth
Launch Date 24 Feb 05
NAV (26 Sep 25) ₹254.848 ↓ -4.85   (-1.87 %)
Net Assets (Cr) ₹17,508 on 31 Aug 25
Category Equity - Small Cap
AMC Kotak Mahindra Asset Management Co Ltd
Rating
Risk Moderately High
Expense Ratio 1.66
Sharpe Ratio -0.59
Information Ratio -0.92
Alpha Ratio -1.53
Min Investment 5,000
Min SIP Investment 1,000
Exit Load 0-1 Years (1%),1 Years and above(NIL)

Growth of 10,000 investment over the years.

DateValue

Kotak Small Cap Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹584,107.
Net Profit of ₹284,107
Invest Now

Returns for Kotak Small Cap Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 Sep 25

DurationReturns
1 Month -1.3%
3 Month -3.7%
6 Month 8.9%
1 Year -11.6%
3 Year 16.2%
5 Year 26.8%
10 Year
15 Year
Since launch 17%
Historical performance (Yearly) on absolute basis
YearReturns
2024 25.5%
2023 34.8%
2022 -3.1%
2021 70.9%
2020 34.2%
2019 5%
2018 -17.3%
2017 44%
2016 8.9%
2015 7.4%
Fund Manager information for Kotak Small Cap Fund
NameSinceTenure

Data below for Kotak Small Cap Fund as on 31 Aug 25

Equity Sector Allocation
SectorValue
Asset Allocation
Asset ClassValue
Top Securities Holdings / Portfolio
NameHoldingValueQuantity

9. SBI Small Cap Fund

(Erstwhile SBI Small & Midcap Fund)

The Scheme seeks to generate income and long term capital appreciation by investing in a diversified portfolio of predominantly in equity and equity related securities of small & midcap Companies

Research Highlights for SBI Small Cap Fund

  • Upper mid AUM (₹35,245 Cr).
  • Established history (16+ yrs).
  • Top rated.
  • Risk profile: Moderately High.
  • 5Y return: 24.21% (bottom quartile).
  • 3Y return: 15.05% (bottom quartile).
  • 1Y return: -9.40% (lower mid).
  • Alpha: 0.00 (upper mid).
  • Sharpe: -0.72 (bottom quartile).
  • Information ratio: 0.00 (upper mid).

Below is the key information for SBI Small Cap Fund

SBI Small Cap Fund
Growth
Launch Date 9 Sep 09
NAV (26 Sep 25) ₹169.342 ↓ -2.84   (-1.65 %)
Net Assets (Cr) ₹35,245 on 31 Aug 25
Category Equity - Small Cap
AMC SBI Funds Management Private Limited
Rating
Risk Moderately High
Expense Ratio 1.58
Sharpe Ratio -0.72
Information Ratio 0
Alpha Ratio 0
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.

DateValue

SBI Small Cap Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹556,833.
Net Profit of ₹256,833
Invest Now

Returns for SBI Small Cap Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 Sep 25

DurationReturns
1 Month -0.8%
3 Month -1.8%
6 Month 8.1%
1 Year -9.4%
3 Year 15%
5 Year 24.2%
10 Year
15 Year
Since launch 19.3%
Historical performance (Yearly) on absolute basis
YearReturns
2024 24.1%
2023 25.3%
2022 8.1%
2021 47.6%
2020 33.6%
2019 6.1%
2018 -19.6%
2017 78.7%
2016 1.3%
2015 20.6%
Fund Manager information for SBI Small Cap Fund
NameSinceTenure

Data below for SBI Small Cap Fund as on 31 Aug 25

Equity Sector Allocation
SectorValue
Asset Allocation
Asset ClassValue
Top Securities Holdings / Portfolio
NameHoldingValueQuantity

10. Aditya Birla Sun Life Small Cap Fund

(Erstwhile Aditya Birla Sun Life Small & Midcap Fund)

An Open ended Small and Mid Cap Equity Scheme with an objective to generate consistent long-term capital appreciation by investing predominantly in equity and equity related securities of companies considered to be small and midcap. The Scheme may also invest a certain portion of its corpus in fixed income securities including money market instruments, in order to meet liquidity requirements from time to time.

Research Highlights for Aditya Birla Sun Life Small Cap Fund

  • Bottom quartile AUM (₹4,824 Cr).
  • Established history (18+ yrs).
  • Rating: 5★ (top quartile).
  • Risk profile: Moderately High.
  • 5Y return: 22.94% (bottom quartile).
  • 3Y return: 17.51% (bottom quartile).
  • 1Y return: -9.95% (lower mid).
  • Alpha: 0.00 (lower mid).
  • Sharpe: -0.56 (upper mid).
  • Information ratio: 0.00 (lower mid).

Below is the key information for Aditya Birla Sun Life Small Cap Fund

Aditya Birla Sun Life Small Cap Fund
Growth
Launch Date 31 May 07
NAV (26 Sep 25) ₹83.2535 ↓ -1.63   (-1.92 %)
Net Assets (Cr) ₹4,824 on 31 Aug 25
Category Equity - Small Cap
AMC Birla Sun Life Asset Management Co Ltd
Rating
Risk Moderately High
Expense Ratio 1.89
Sharpe Ratio -0.56
Information Ratio 0
Alpha Ratio 0
Min Investment 1,000
Min SIP Investment 1,000
Exit Load 0-365 Days (1%),365 Days and above(NIL)

Growth of 10,000 investment over the years.

DateValue

Aditya Birla Sun Life Small Cap Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹530,691.
Net Profit of ₹230,691
Invest Now

Returns for Aditya Birla Sun Life Small Cap Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 26 Sep 25

DurationReturns
1 Month -0.4%
3 Month -4.2%
6 Month 11.2%
1 Year -10%
3 Year 17.5%
5 Year 22.9%
10 Year
15 Year
Since launch 12.2%
Historical performance (Yearly) on absolute basis
YearReturns
2024 21.5%
2023 39.4%
2022 -6.5%
2021 51.4%
2020 19.8%
2019 -11.5%
2018 -22.6%
2017 56.7%
2016 9.7%
2015 13.4%
Fund Manager information for Aditya Birla Sun Life Small Cap Fund
NameSinceTenure

Data below for Aditya Birla Sun Life Small Cap Fund as on 31 Aug 25

Equity Sector Allocation
SectorValue
Asset Allocation
Asset ClassValue
Top Securities Holdings / Portfolio
NameHoldingValueQuantity

Conclusion

Small-cap mutual funds are powerful wealth-creation tools—but only for those who approach them with patience, purpose, and knowledge. Don’t fall for half-truths. Know what you’re investing in.

If you're building a long-term SIP strategy, small-caps deserve a thoughtful place—not a reckless bet.

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.
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