Investing in small cap mutual funds has always been an exciting opportunity for those looking to diversify their portfolios and tap into the high growth potential of emerging companies. As we enter 2024, identifying the best small cap mutual funds to invest in India becomes even more crucial. With the Indian economy on a recovery path and technological advancements driving new business opportunities, small-cap mutual funds offer a unique chance to benefit from the dynamism and agility of smaller companies.
Small cap mutual funds are investment vehicles that focus on companies with relatively small market capitalizations, typically between ₹2,000 crores and ₹10,000 crores. These funds are known for their potential to deliver high returns as they invest in smaller, often more dynamic companies with significant room for growth. Unlike large-cap companies, which are already well-established, small-cap firms are in their early stages of development and can offer substantial upside as they expand.
Investing in the best small-cap mutual funds in India can provide Indian investors with an opportunity to diversify their portfolios and capitalize on the growth potential of emerging businesses. However, it's important to remember that with higher growth potential comes increased volatility. Also, there is a risk of economic effects, so careful selection and a long-term perspective are essential when investing in these funds.
As we enter 2024, let’s highlight the 10 Best Small Cap Mutual Funds, considering 'fund performance' as a key criterion for selection. Each fund’s unique strategy and asset allocation promises to cater to different investor profiles and financial goals.
| 10 Best Small Cap Mutual Funds (2024) | 5Yr Return |
|---|---|
| 1. Quant Small Cap Direct Growth | 43.14% |
| 2. Bank of India Small Cap Direct Growth | 35.1% |
| 3. Nippon India Small Cap Direct Growth | 33.83% |
| 4. Edelweiss Small Cap Direct Growth | 31.95% |
| 5. Canara Robeco Small Cap Direct Growth | 31.72% |
| 6. Tata Small Cap Fund Direct Growth | 31.47% |
| 7. Kotak Small Cap Direct Growth | 30.98% |
| 8. Invesco India Smallcap Direct Growth | 30.59% |
| 9. Axis Small Cap Fund Direct Growth | 29.56% |
| 10. ICICI Pru Smallcap Direct Growth | 29.35% |
Here is an overview of the 10 Top Small Cap Mutual Funds and their Expense Ratio, NAV, and Returns.
Quant Mutual Fund is one of the best small cap mutual fund under the Equity Mutual Fund Scheme. Investors were allowed to access this programme on April 15, 1996. The current fund manager of the Quant Small Cap Fund Direct Plan-Growth fund is Pushpa Rai.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
| 67.44 | 150.38 | 500.9 |
The Bank of India Mutual Fund introduced the Bank of India Small Cap Fund Direct-Growth equity mutual fund scheme. Investors were allowed to access this plan on March 31, 2008. Currently serving as the fund manager for the Bank of India Small Cap Fund Direct Growth fund is Ajay Khandelwal.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
| 52.02 | 118.18 | 350.07 |
Nippon India Mutual Fund introduced the Equity Mutual Fund Scheme Nippon India Small Cap Fund Direct-Growth, which is one of the best small-cap mutual fund in India 2024. Investors were eligible to access this plan on June 30, 1995. The current fund manager of the Nippon India Small Cap Fund Direct Growth fund is Samir Rachh, Dhrumil Shah.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
| 73.9 | 161.5 | 251.4 |
The Edelweiss Mutual Fund introduced the Edelweiss Small Cap Fund Direct Growth Equity Mutual Fund Scheme. Investors were allowed to access this plan on April 30, 2008. Currently serving as the Edelweiss Small Cap Fund Direct Growth fund's fund manager is Harshad Patwardhan.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
| 48.96 | 118.28 | 299.99 |
Canara Robeco Mutual Fund introduced the Canara Robeco Small Cap Fund Direct Growth Equity Mutual Fund Scheme. Investors were eligible to access this plan on December 19, 1987. Currently serving as the fund manager for the Canara Robeco Small Cap Fund Direct Growth fund is Cheenu Gupta.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
| 43.41 | 117.98 | 296.51 |
Tata Mutual Fund introduced the Tata Small Cap Fund Direct-Growth equity mutual fund scheme. Investors were eligible to access this plan on June 30, 1995. The Tata Small Cap Fund Direct-Growth fund's current fund manager is Chandraprakash Padiyar.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
| 46.95 | 131.36 | 292.77 |
Kotak Mahindra Mutual Fund introduced the Kotak Small Cap Fund Direct Growth equity mutual fund scheme. Investors were eligible to access this plan on August 5, 1994. Currently serving as the Kotak Small Cap Fund Direct Growth fund's fund manager is Pankaj Tibrewal.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
| 43.9 | 98.99 | 285.5 |
An equity mutual fund scheme called Invesco India Smallcap Fund Direct Growth was introduced by Invesco Mutual Fund. Investors were allowed to access this plan on July 24, 2006. The current fund manager of the Invesco India Smallcap Fund Direct Growth fund is Taher Badshah.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
| 56.61 | 128.59 | 279.8 |
Axis Mutual Fund introduced the Equity Mutual Fund Scheme Axis Small Cap Fund Direct Growth. Investors were allowed to access this plan from September 4, 2009. The current fund manager of the Axis Small Cap Fund Direct Growth fund is Ashish Naik.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
| 40.04 | 102.04 | 265.05 |
ICICI Prudential Mutual Fund introduced the Equity Mutual Fund Scheme ICICI Prudential Smallcap Fund Direct Plan Growth. Investors were given access to this plan on October 12, 1993. The current fund managers of the ICICI Prudential Smallcap Fund Direct Plan Growth fund are S Naren, Atul Patel, and Priyanka Khandelwal.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
| 45.87 | 161.5 | 262.1 |
Focusing on the top tier, the 5 Top Performing Small Cap Mutual Funds offer a blend of dynamism and stability with 1 yr Highest Growth.
The top investment options for 2024 are:
| 5 Best Performing Small Cap Mutual Funds | 1Yr Return |
|---|---|
| 1. Bandhan Small Cap Direct Growth | 75.85% |
| 2. Mahindra Manulife Small Cap Direct Growth | 73.73% |
| 3. ITI Small Cap Direct Growth | 70.09% |
| 4. Quant Small Cap Direct Growth | 67.44% |
| 5. Nippon India Small Cap Direct Growth | 59.97% |
Focusing on stability in the long run, the 5 Top Small Cap mutual funds for the long term offer a blend of dynamism and growth with 10 yr Highest Growth.
| Best Mutual Funds for the long term | 10Yr Return |
|---|---|
| 1. Nippon India Small Cap Direct Growth | 1063.18% |
| 2. SBI Small Cap Fund Direct Growth | 1024.63% |
| 3. Axis Small Cap Fund Direct Growth | 755.29% |
| 4. DSP Small Cap Direct Growth | 746.36% |
| 5. HSBC Small Cap Fund Dir Gr | 733.46% |
When it comes to taxes and small-cap mutual funds, there are a few important things to consider. Here's what you need to know:
Ready to invest in a small-cap mutual fund? Here’s how you can get started easily with Lakshmishree.
Investing in small-cap mutual funds in 2024 offers a promising opportunity for those seeking high growth potential in their portfolios. The dynamic nature of small-cap companies and India's economic recovery and technological advancements create an environment ripe for significant returns. However, it's crucial to acknowledge the inherent risks associated with these investments, such as higher volatility, market sensitivity, and longer investment horizons. By carefully selecting the best small-cap mutual funds, diversifying their portfolios, and maintaining a long-term perspective, investors can effectively capitalize on the growth potential of emerging businesses while mitigating potential downsides.
The best Small-cap Mutual funds in India are Quant Small Cap, Bank of India Small Cap, Nippon India Small Cap, Edelweiss Small Cap, and Canara Robeco Small Cap, which are known for their consistent and high-return mutual funds in India.
Small-cap mutual funds are investment vehicles that focus on companies with small market capitalizations, typically between ₹2,000 crores and ₹10,000 crores. These funds target smaller, often more dynamic, companies with significant growth potential.
Investing in small-cap mutual funds can offer high growth potential, especially during periods of economic recovery. Small-cap companies often innovate quickly and can capitalize on new opportunities, making them attractive for long-term growth.
The Top performing small cap mutual funds for investment in 2024 are :
1. Bandhan Small Cap Direct Growth
2. Mahindra Manulife Small Cap Direct Growth
3. ITI Small Cap Direct Growth
4. Quant Small Cap Direct Growth
5. Nippon India Small Cap Direct Growth
The primary risks include higher volatility, market sensitivity, longer investment horizons, and lower liquidity. Small-cap stocks can experience significant price swings and may be more vulnerable during market downturns.
When choosing a small cap mutual fund, consider factors such as past performance, expense ratio, fund manager's expertise, and the fund's portfolio composition. Ensure the fund aligns with your investment goals and risk tolerance.
The minimum investment required can vary by fund. Typically, it ranges from as low as ₹100 to ₹1,000 for lump sum investments. Always check the specific requirements of the fund you are interested in.
