Best Small Cap Mutual Funds to Invest in 2024

Best-Small-Cap-Mutual-Funds-in-India

Small Cap Mutual Funds are a type of Equity Mutual Fund that invests in small or emerging companies and other securities like bonds, fixed-income assets, etc. Small Cap is categorized as one of India’s leading companies by rank 250 and beyond companies as per Market Capitalization.

These companies can be unstable as they emerge. Yet, these companies can become a multi bagger in the future.

Small Cap companies have a market capital of less than or equal to 5000 crore. These companies are kind of inconsistent in business, revenue, profit, and dividend payouts.

So, these Small Cap might provide high returns or huge losses, as this investment category is prone to high volatility, and risk is like a double-edged sword.

Many investors tend to choose Small Cap Mutual Funds ahead of large Cap mutual funds and Mid Cap Mutual funds as the results are pretty good with moderate risk.

At the same time, indices like Nifty Small Cap 50, Nifty Small Cap 100, and Nifty Small Cap 250 also invest in these companies.

The best performing small cap mutual funds have produced around 22.13% (on average) since inception. Still, if you invest in Small Cap Mutual funds, you should at least (minimum) hold your investments for 10–15 years.

Here is the list of the 10 best Small Cap Mutual Funds to invest in India in 2024. We have drafted this list, posting multiple analyses on the following:

  • AUM (Asset Under Management)
  • 5 Years Performance.
  • Performance from Inception
  • Volatility against Index
  • Expense Ratio
  • Percentage of equity holdings.

The base Criteria behind the 10 best small cap mutual funds is that AUM should be

  • Minimum 1000 Crores
  • More than 5 years in the market.
  • Direct Plan – Growth Option

What are the Best Small Cap Mutual Funds in India 2024?

1. Axis Small Cap Fund Direct Plan Growth

It is one of the top picks from our analysis, as the fund has completed 10+ years in the market. The fund was started in December 2013, and since its inception, it has yielded a CAGR of 25.56%. The benchmark index for the fund is S&P BSE smallcap TRI

Here are the Stats, on why we ranked Axis small cap direct plan fund as the best small cap mutual fund to invest in 2024

  • AUM (Asset Under Management – Rs. 18615.72 Crores
  • Expense Ratio – 0.53%
  • 5 Years Performance – 30.11%
  • Performance since Inception – 25.56%
  • Percentage of Equity Holding – 92.90%
  • Risk vs Category – Low Risk

Axis Smallcap Fund Direct Plan growth is managed by the most experienced fund managers Anupam Tiwari (since Oct 2016), Vinayak Jayanth (since Jan 2023), Shreyash Devalkar (since Mar 2023), and Mayank Hyanki (since Aug 2023). This fund has an asset allocation of Equity (91.8%), Debt (9.6%), and Cash (-1.4%).

The equity portfolio consists of various sectors like Construction (17.4%), Chemicals (8.8%), Technology (10.6%), Healthcare (13.8%), Financial (15.3%), Metal & Mining (5.3%), Consumer Staples (5.9%), Captial Goods (6.0), Automobile (7.3), Others (9.7%).

Here is the Risk Ratio of the Fund (3 Years Analysis):

  • Standard Deviation – 12.15 vs 13.66 (Index)
  • Sharpe Ratio – 2.04 vs 1.13 (Index)
  • Alpha – 5.56 vs 14.81 (Index)
  • Beta – 0.67 vs 0.44 (Index)
  • R2 – 91.01 vs 21.65 (Index)

Other Details of the Fund:

  • P/E – 33.94
  • P/B – 5.25
  • Top 5 Equities hold 19% of AUM
  • Top 20 Equities hold 47% of AUM
  • Exit Load – 1 %if redeemed within 1 year
  • Stamp Duty – 0.005%
  • Minimum SIP – 100
Pros
  • 5 Years Performance is higher than the category average.
  • Expense ratio is 0.55% lower than the category average.
  • Low risk compared to the Category.
Cons
  • Last 1 Year returns were low compared to the category average.
  • 25.56% returns since inception, lower than the category average.

2. Nippon India Small Cap Fund – Direct Plan-Growth

Nippon India Small Cap Fund-Direct Plan-Growth is one of the top picks from our analysis, as the fund nears 10+ years of completion. The fund was started in January 2013, and since its inception, it has yielded a CAGR of  27.30% The benchmark index for the fund is S&P BSE smallcap TRI

Here are the Stats, and why we ranked them as the best small cap mutual funds to invest in 2024

  • AUM (Asset Under Management – Rs. 43815.61 Crores
  • Expense Ratio – 0.73%
  • 5 Years Performance – 32.27%
  • Performance since Inception – 27.30%
  • Percentage of Equity Holding – 96.40%
  • Risk vs Category – Moderately High Risk

Nippon India Small Cap Fund Direct Plan growth is managed by the most experienced fund managers, Samir Rachh (since Jan 2017) and Tejas Sheth (since Feb 2023). This fund has an asset allocation of equity (96.0%) and cash (4.0%).

The equity portfolio consists of various sectors like Capital Goods (19.0%), Chemicals (6.9%), Technology (6.5%),  Consumer Staples (8.0%), Financial (13.1%), Construction (6.9%), Automobile (6.3%), Services (10.2%), Health Care (8.3%), Others (14.9%).

Here is the Risk Ratio of the Fund (3 Years Analysis):

  • Standard Deviation – 15.56 vs 13.66 (Index)
  • Sharpe Ratio – 2.03 vs 1.13 (Index)
  • Alpha – 6.63 vs 14.81 (Index)
  • Beta – 0.87 vs 0.44 (Index)
  • R2 – 94.38 vs 21.65 (Index)

Other Details of the Fund:

  • P/E – 29.44
  • P/B – 4.10
  • Top 5 Equities hold 9% of AUM
  • Top 20 Equities hold 25% of AUM
  • Exit Load – 1%if redeemed within 1 month
  • Stamp Duty – 0.005%
  • Minimum SIP – 100
Pros
  • Last 1 and 5 Years Performance were higher than the category average
  • 27.30% returns since Inception, higher than the category average.
Cons
  • Moderately High risk compared to the Category
  • Expense Ratio is 0.73%, higher than the category average.

3. Kodak Small Cap Fund – Direct Plan – Growth

Kodak Small Cap Fund is one of the top 10 picks from our analysis, as it nears 10+ years of completion. The fund was started in Jan 2013, and since its inception, it has yielded a CAGR of 21.21%. The benchmark index for the fund is S&P BSE smallcap TRI

Here are the Stats, and why we ranked them as the best small cap mutual funds to invest in 2024

  • AUM (Asset Under Management – Rs. 14082.01 Crores
  • Expense Ratio – 0.43%
  • 5 Years Performance – 29.66%
  • Performance since Inception – 21.21%
  • Percentage of Equity Holding – 95.30%
  • Risk vs Category (5 Years) – Moderately Low Risk

Kotak Small Cap Fund Direct plan growth is managed by the most experienced fund managers Arjun Khanna (since March 2022) and Harish Bihani (Since Oct 2023). This fund has an asset allocation of Equity (94.9%) and cash (5.1%).

The equity portfolio consists of various sectors like Capital Goods (13.5%), Health Care (6.7%), Construction (7.5%), Metals & Mining (9.9%),  Services (8.9%), Consumer Descretionary (11.5%), Consumer Staples (5.9%), Chemicals (10%), Automobile (6.2%), Technology (6.8%), Financial (5.1%), Others (5.2%).

Here is the Risk Ratio of the Fund (3 Years Analysis):

  • Standard Deviation – 14.73 vs 13.66 (Index)
  • Sharpe Ratio – 1.63 vs 1.13 (Index)
  • Alpha – 1.45 vs 14.81 (Index)
  • Beta – 0.79 vs 0.44 (Index)
  • R2 – 85.26 vs 21.65 (Index)

Other Details of the Fund:

  • P/E – 33.46
  • P/B – 4.83
  • Top 5 Equities hold 17% of AUM
  • Top 20 Equities hold 46% of AUM
  • Exit Load – 1 %if redeemed within 1 year
  • Stamp Duty – 0.005%
  • Minimum SIP – 100
Pros
  • 5 Years Performance is higher than the category average.
  • Moderate risk compared to Category.
Cons
  • Last 1 Year returns were low compared to the category average
  • 21.21% returns since inception, lower than the category average.
  • Expense Ratio is 0.43%, higher than the category average.

4. HDFC Small Cap Fund – Direct Plan – Growth

HDFC Small Cap Fund Direct Plan Growth is one of the top picks from our analysis, as the fund nears 10+ years of completion. The fund was started in Jan 2013, and since its inception, it has yielded a CAGR of 21.49%. The benchmark index for the fund is S&P BSE smallcap TRI

Here are the Stats, and why we ranked them as the best small-cap mutual funds to invest in 2024

  • AUM (Asset Under Management – Rs. 26836.99 Crores
  • Expense Ratio – 0.61%
  • 5 Years Performance – 25.91%
  • Performance since Inception – 21.49%
  • Percentage of Equity Holding – 90.80%
  • Risk vs Category (5 Years) – Moderately High Risk

HDFC Small Cap Fund Direct plan growth is managed by the most experienced fund managers, Chirag Setalvad (since Jun 2014) and Dhruv Muchhal (since Jan 2023). This fund has an asset allocation of equity (93.5%) and cash (6.5%).

The equity portfolio consists of various sectors like Services (21.4%), Chemicals (6.4%), Caaptial Goods (13.2), Financial (13.2%), Technology (5.5%), Automobile (5.7%), Consumer Staples (6.3%), Health Care (11.9%), Others (16.4%).

Here is the Risk Ratio of the Fund (3 Years Analysis):

  • Standard Deviation – 16.22 vs 13.66 (Index)
  • Sharpe Ratio – 1.77 vs 1.13 (Index)
  • Alpha – 3.18 vs 14.81 (Index)
  • Beta – 0.89 vs 0.44 (Index)
  • R2 – 90.97 vs 21.65 (Index)

Other Details of the Fund:

  • P/E – 20.40
  • P/B – 3.14
  • Top 5 Equities hold 18% of AUM
  • Top 20 Equities hold 47% of AUM
  • Exit Load – 1 %if redeemed within 1 year
  • Stamp Duty – 0.005%
  • Minimum SIP – 100
Pros
  • Last 1 Year returns were higher compared to the category average.
  • Moderately low risk compared to the Category.
Cons
  • 5 Years Performance is lower than the category average
  • 18.44% returns since inception, lower than the category average.
  • Expense Ratio is 0.43%, higher than the category average

5. HSBC Small Cap Fund – Direct Plan – Growth

HSBC Small Cap Fund (Formerly known as L&T Emerging Businesses Fund). is one of the top picks from our analysis, as the fund nears 10+ years of completion. The fund was started in May 2014, and since its inception, it has yielded a CAGR of  22.79%. The benchmark index for the fund is S&P BSE smallcap TRI.

Here are the Stats, and why we ranked them as the best small cap mutual funds to invest in 2024

  • AUM (Asset Under Management – Rs. 13230.82 Crores
  • Expense Ratio – 0.68%
  • 5 Years Performance – 26.79%
  • Performance since Inception – 22.79%
  • Percentage of Equity Holding – 98.50%
  • Risk vs Category – Moderate Risk

HSBC Small Cap Fund Direct plan growth is managed by the most experienced fund managers Venugopal Manghat (since Dec 2019), Sonal Gupta (since July 2021) & Cheenu Gupta (since Oct 2023). This fund has an asset allocation of Equity (98.2%) and cash (1.8%).

The equity portfolio consists of various sectors like Financial (8.7%), Textiles (6.2%), (Chemicals (6.6%), Metal and Mining (10.4%), Capital Goods (14.7%), Construction (16.9%), Consumer Staples (5.4%), Technology (9.0%), Services (8.0%) and Others (14.1%).

Here is the Risk Ratio of the Fund (5 Years Analysis):

  • Standard Deviation – 15.18 vs 13.66 (Index)
  • Sharpe Ratio – 2.07 vs 1.13 (Index)
  • Alpha – 7.26 vs 14.81 (Index)
  • Beta – 0.85 vs 0.44 (Index)
  • R2 – 92.72 vs 21.65 (Index)

Other Details of the Fund:

  • P/E – 31.60
  • P/B – 4.68
  • Top 5 Equities hold 14% of AUM
  • Top 20 Equities hold 42% of AUM
  • Exit Load – 1 %if redeemed within 1 year
  • Stamp Duty – 0.005%
  • Minimum SIP – 500
Pros
  • Last 1 Year returns were higher compared to the category average.
  • Same Fund Manager since inception.
Cons
  • 5 Years Performance is lower than the category average
  • 20.71% returns since Inception, lower than the category average
  • Expense Ratio is 0.68%, higher than the category average
  • Moderate risk compared to the Category

6. ICICI Prudential Small Cap Fund – Direct Plan – Growth 

ICICI Prudential Small Cap Fund Direct Plan Growth is one of the top picks from our analysis, as the fund nears 10+ years of completion. The fund was started in Jan 2013, and since its inception, it has yielded a CAGR of 19.03%. The benchmark index for the fund is S&P BSE smallcap TRI

Here are the Stats, and why we ranked them as the best small cap mutual funds to invest in 2024

  • AUM (Asset Under Management – Rs. 7091.81 crore
  • Expense Ratio – 0.61%
  • 5 Years Performance – 30.06%
  • Performance since Inception – 19.03%
  • Percentage of Equity Holding – 94.30%
  • Risk vs Category (5 Years) – Moderately Low Risk

ICICI Prudential Small Cap Fund Direct Plan Growth is managed by the most experienced fund managers, Sharmila D’mello (since July 2022), Sri Sharma (since Mar 2023), and Anish Tawakle (since Sep 2023). This fund has an asset allocation of equity (91.8%) and cash (8.2%).

The equity portfolio consists of various sectors like Chemicals (10.6%), Technology (6.0%), Capital Goods (13.9%), Construction (14.8%), Automobile (10.9%), Consumer Staples (5.3%), Services (11.6%), Financial (7.5%), Health Care (9.7%), Others (9.7%).

Here is the Risk Ratio of the Fund (3 Years Analysis):

  • Standard Deviation – 14.99 vs 13.66 (Index)
  • Sharpe Ratio – 1.80 vs 1.13 (Index)
  • Alpha – 4.97 vs 14.81 (Index)
  • Beta – 0.77 vs 0.44 (Index)
  • R2 – 78.37 vs 21.65 (Index)

Other Details of the Fund:

  • P/E – 29.10
  • P/B – 4.16
  • Top 5 Equities hold 15% of AUM
  • Top 20 Equities hold 41% of AUM
  • Exit Load – 1 %if redeemed within 1 year
  • Stamp Duty – 0.005%
  • Minimum SIP – 100
Pros
  • Moderately low risk compared to the Category
  • Fund Managers managing since inception
Cons
  • 5 and 1 Years Performance is lower than the category average
  • 19.03% return since inception, lower than the category average.
  • Expense Ratio is 0.66%, higher than the category average.

7. DSP Smallcap Fund – Direct Plan – Growth

DSP Small Cap Fund Direct Plan Growth is one of the top picks from our analysis, as the fund nears 10+ years of completion. The fund was started in Jan 2013, and since its inception, it has yielded a CAGR of  23.17%. The benchmark index for the fund is S&P BSE smallcap TRI

Here are the Stats, and why we ranked them as the best small-cap mutual funds to invest in 2024

  • AUM (Asset Under Management – Rs. 13514Crores
  • Expense Ratio – 0.78%
  • 5 Years Performance – 27.73%
  • Performance since Inception – 23.17%
  • Percentage of Equity Holding – 94.70%
  • Risk vs Category – Moderate Risk

DSP Smallcap Fund Direct Plan Growth is managed by the most experienced fund managers Vinit Sambre (since Jan 2013), Jay Kothari (Since Mar 2013),  Resham Jain (Since Mar 2018), and Abhishek Ghosh(Since Sep 2022). This fund has an asset allocation of Equity (94.2%) and cash (5.8%).

The equity portfolio consists of various sectors like Chemicals (18.8%), Capital Goods (9.9%), Construction (7.4%),  Automobile (5.0%), Consumer Staples (10.6%), Services (7.5%), Metal and Mining (8.4%), Consumer Discretionary (7.1%), Financial (6.9%), healthcare (8.6%), Others (9.9%).

Here is the Risk Ratio of the Fund (3 Years Analysis):

  • Standard Deviation – 15.88 vs 13.66 (Index)
  • Sharpe Ratio – 1.61 vs 1.13 (Index)
  • Alpha – 0.63 vs 14.81 (Index)
  • Beta – 0.87 vs 0.44 (Index)
  • R2 – 90.58 vs 21.65 (Index)

Other Details of the Fund:

  • P/E – 27.34
  • P/B – 3.84
  • Top 5 Equities hold 16% of AUM
  • Top 20 Equities hold 45% of AUM
  • Exit Load – 1 %if redeemed within 1 year
  • Stamp Duty – 0.005%
  • Minimum SIP – 100
Pros
  • 5 Years Performance is higher than the category average
  • Moderately risk compared to the Category
  • Fund Managers managing since inception
Cons
  • Last 1 Year returns were low compared to the category average
  • 23.17% returns since Inception, lower than the category average.
  • Expense Ratio was 0.78%, higher than the category average.

8. Franklin India Small Companies Fund – Direct Plan – Growth

Franklin India Small Companies Fund Direct Plan Growth is one of the top picks from our analysis, as the fund nears 10+ years of completion. The fund was started in Jan 2013, and since its inception, it has yielded a CAGR of 22.84%. The benchmark index for the fund is S&P BSE smallcap TRI

Here are the Stats, and why we ranked them as the best small-cap mutual funds to invest in 2024

  • AUM (Asset Under Management – Rs. 11397.83 Crores
  • Expense Ratio – 0.93%
  • 5 Years Performance – 25.51%
  • Performance since Inception – 22.84%
  • Percentage of Equity Holding – 93%
  • Risk vs Category – Moderately Low Risk

Franklin India Small Company Fund Direct plan growth is managed by the most experienced fund managers, R. Janakiraman (since Jan 2013),  Sandeep Manam (since Oct 2021), and Akhil Kalluri (since Sep 2022). This fund has an asset allocation of equity (94.0%), debt (0.2%), and cash (5.8%).

The equity portfolio consists of various sectors like Financials (18.3%), Construction (14.0%), Services (12.5%),  Chemicals (9.4%), Technology (5.3%), Healthcare (6.4%), Consumer Discretionary (6.9%), Consumer Staples (6.2%), Capital Goods (7.2%), Others (11.2%).

Here is the Risk Ratio of the Fund (3 Years Analysis):

  • Standard Deviation – 14.71 vs 13.66 (Index)
  • Sharpe Ratio – 1.91 vs 1.13 (Index)
  • Alpha – 5.53 vs 14.81 (Index)
  • Beta – 0.78 vs 0.44 (Index)
  • R2 – 85.51 vs 21.65 (Index)

Other Details of the Fund:

  • P/E – 28.24
  • P/B – 4.15
  • Top 5 Equities hold 17% of AUM
  • Top 20 Equities hold 45% of AUM
  • Exit Load – 1 %if redeemed within 1 year
  • Stamp Duty – 0.005%
  • Minimum SIP – 500
Pros
  • 20.08% returns since inception, higher than the category average.
  • Last 1 Year returns were higher compared to the category average
  • Moderately low risk compared to the Category
Cons
  • 5 Years Performance was lower than the category average
  • Expense Ratio is 0.9%, higher than the category average.

9. Sundaram Small Cap Fund – Direct Plan – Growth

Sundaram Small Cap Fund-Direct Plan-Growth is one of the top picks from our analysis, as the fund nears 10+ years of completion. The fund was started in Jan 2013, and since its inception, it has yielded a CAGR of  19.81%. The benchmark index for the fund is S&P BSE smallcap TRI

Here are the Stats, and why we ranked them as the best small cap mutual funds to invest in 2024

  • AUM (Asset Under Management – Rs. 3007.86 Crores
  • Expense Ratio – 1.01%
  • 5 Years Performance – 26.96%
  • Performance since Inception – 19.81%
  • Percentage of Equity Holding – 96%
  • Risk vs Category – Moderately Low Risk

Sundaram Small Cap Fund, Direct Plan Growth, is managed by the most experienced fund managers, Ravi Gopalakrishnan (since Jan 2022) and Rohith Seksaria (since Nov 2022). This fund has an asset allocation of Equity (95.2%) and cash (4.8%).

The equity portfolio consists of various sectors like Financial (25.6%), Technology (10.4%), Services (14.1%),  Construction (7.8%), Capital Goods (9.8%), Chemicals (5.5%), Healthcare (9,.1%), Consumer Staples (7.4%), Others (10.3%).

Here is the Risk Ratio of the Fund (5 Years Analysis):

  • Standard Deviation – 14.74 vs 13.66 (Index)
  • Sharpe Ratio – 1.78 vs 1.13 (Index)
  • Alpha – 2.80 vs 14.81 (Index)
  • Beta – 0.82 vs 0.44 (Index)
  • R2 – 92.27 vs 21.65 (Index)

Other Details of the Fund:

  • P/E – 26.94
  • P/B – 4.16
  • Top 5 Equities hold 15% of AUM
  • Top 20 Equities hold 46% of AUM
  • Exit Load – 1 %if redeemed within 1 year
  • Stamp Duty – 0.005%
  • Minimum SIP – 100
Pros
  • Last 1 Year returns were higher compared to the category average
  • Moderately Low risk compared to the Category
  • You can invest with Rs. 100 per month via SIP
Cons
  • Last 5 Year returns were low compared to the category average
  • 19.81% returns since Inception, lower than the category average.
  • Expense Ratio is 0.84%, higher than the category average.

10. Aditya Birla Sun Life Small Cap Fund – Direct Plan – Growth

Aditya Birla Sun Life Small Cap fund is one of the top picks from our analysis, as the fund has completed 10+ years in the market.

The fund was started in Jan 2013, and since its inception, it has yielded a CAGR of  18.07%. The benchmark index for the fund is S&P BSE smallcap TRI

Here are the Stats, and why we ranked them as the best small cap mutual funds to invest in 2024.

  • AUM (Asset Under Management – Rs. 5251.11 Crores
  • Expense Ratio – 0.73%
  • 5 Years Performance – 20.26%
  • Performance since Inception – 18.07%
  • Percentage of Equity Holding – 95.50%
  • Risk vs Category – Moderate High Risk

Aditya Birla Sun Life Small Cap Fund Direct plan growth is managed by the most experienced fund managers Vishal Gajwani (since Apr 2022), and Dhaval Joshi (Since Nov 2022). This fund has an asset allocation of Equity (95.8%) and cash (4.2%).

The equity portfolio consists of various sectors like Construction (13.8%), Consumer Staples (8.9%),  Technology (8.2%), Financial (14.9%), Capital Goods (13.5%), Healthcare (6.7%), Services (11.0%), Automobile (5.1%), and Others (18.1%).

Here is the Risk Ratio of the Fund (5 Years Analysis):

  • Standard Deviation – 16.53 vs 13.66 (Index)
  • Sharpe Ratio – 1.31 vs 1.13 (Index)
  • Alpha – (-)4.48 vs 14.81 (Index)
  • Beta – 0.91 vs 0.44 (Index)
  • R2 – 90.89 vs 21.65 (Index)

Other Details of the Fund:

  • P/E – 32.09
  • P/B – 4.43
  • Top 5 Equities hold 12% of AUM
  • Top 20 Equities hold 38% of AUM
  • Exit Load – 1% if redeemed within 90 days
  • Stamp Duty – 0.005%
  • Minimum SIP – 1000
Pros
  • You can invest Rs.1000 per month via SIP
Cons
  • Last 1 and 5 Year returns were low compared to the category average
  • 18.07% returns since inception, lower than the category average.
  • Moderately High risk compared to the Category
  • Expense Ratio is 0.74%, higher than the category average.Alpha is negative (highly volatile).

Conclusion

  • Best Small cap mutual funds invest in the small cap stocks (250-500 Top companies) in India.
  • Here is the complete list of the best small cap mutual funds in India for 2024.
  • The listed 10 small cap funds are ranked based on various criteria which we have discussed in the introduction (check them before you conclude).
  • We are not SEBI-registered advisors, so consult with your equity advisor before choosing any mutual funds.