Looking to invest in funds that offer competitive returns? Small-cap funds concentrate on growing companies and generally outperform large-cap funds. They also provide attractive returns due to the high risk involved.
Over the last five years, a few small-cap funds have consistently outperformed, and investors can invest in fast-growing companies via these funds. Understanding the top-performing small-cap funds can help investors make informed investment decisions. Let’s explore 5 small cap funds to have beaten their benchmark in 5 years.
Overview of the Top 5 Small Cap Funds
Here’s a list of the top 5 small cap funds that have outperformed their benchmarks over the last five years:
| Serial Number | Fund Name | 5 Years Return |
| 1. | Tata Small Cap Fund Direct – Growth | 35.31% |
| 2. | Axis Small Cap Fund Direct Plan – Growth | 31.09% |
| 3. | SBI Small Cap Fund Direct Plan – Growth | 31.59% |
| 4. | Nippon India Small Cap Fund Direct Plan – Growth | 38.70% |
| 5. | HDFC Small Cap Fund Direct Plan – Growth | 30.19% |
5 Small Cap Funds to Have Beaten Their Benchmark in 5 Years
Here are the top 5 small cap funds.
- Tata Small Cap Fund Direct – Growth
This Tata mutual funds is benchmarked against the Nifty Smallcap 250 Total Return Index. It primarily invests in small-cap stocks with the goal of long-term capital appreciation.
- AUM (as of August 2024): ₹8448 Crores
- Expense Ratio: 0.32%
- Top Holdings: BASF India Ltd.: 4.93%, Kirloskar Pneumatic Co. Ltd.: 3.86%, Quess Corp Ltd.: 3.68%, IDFC Ltd.: 3.46%, Elantas Beck India Ltd.: 3.17%.
- Axis Small Cap Fund Direct Plan – Growth
Axis Small Cap Fund Direct Plan – Growth has become a favorite among investors seeking high returns. This fund invests in small-cap companies to help investors profit as small-cap stocks grow.
- AUM (as of August 2024): ₹23339 crore
- Expense Ratio: 0.55%
- Top Holdings: Galaxy Surfactants Ltd., City Union Bank Ltd., JK Cement Ltd., Dixon Technologies (India) Ltd.
- SBI Small Cap Fund Direct Plan – Growth
SBI Small Cap Fund Direct Plan – Growth is well-regarded for its strong performance in the small-cap sector. This fund targets fast-growing companies to deliver high profits to their shareholders. The fund allows investors access to several industries, which helps diversify assets, and the fund managers screen carefully to select companies with sound business strategies and promising futures.
- AUM (as of August 2024): ₹32761 crore
- Expense Ratio: 0.65%
- Top Holdings: Blue Star Ltd., Hawkins Cookers Ltd., V-Guard Industries Ltd., Relaxo Footwears Ltd.
- Nippon India Small Cap Fund Direct Plan – Growth
The Nippon India Small Cap Fund Direct Plan-Growth outperforms similar products with high returns and sensible investments. This fund invests in many small-cap companies, which favors growth-oriented ones.
- AUM (as of August 2024): ₹60372 crore
- Expense Ratio: 0.63%
- Top Holdings: Deepak Nitrite Ltd., Manappuram Finance Ltd., Supreme Industries Ltd., Balrampur Chini Mills Ltd.
- HDFC Small Cap Fund Direct Plan – Growth
HDFC Small Cap Fund’s Direct Plan-Growth seeks established, growing companies for investment. Investors chose the fund because of its steady performance and emphasis on Growth.
- AUM (as of August 2024): ₹33181 crore
- Expense Ratio: 0.65%
- Top Holdings: Sonata Software Ltd., Hawkins Cookers Ltd., Redington (India) Ltd., Firstsource Solutions Ltd.
Conclusion
Investing in small-cap funds can offer significant growth opportunities. The funds discussed here have demonstrated their ability to provide strong returns, making them a solid choice for investors. Before making a decision, investors must consider their risk tolerance and consult a financial advisor before making any choices.
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