Small Cap Mutual Funds are a type of Equity Mutual funds that invest in Small or emerging companies and other securities like bonds, fixed income assets, etc. Small Cap companies are categorized as India’s leading by rank 250 and beyond companies as per Market Capitalization.
These companies can be unstable and highly volatile as they emerge. Yet, these companies can become a multi bagger in future.
Small Cap companies have a market capital of less than or equal to 5000 Cr . These companies are kind of inconsistent in business, revenue, profit, and dividend payouts.
So, these Small Cap might provide high return or huge loss, as this investment category is prone to high volatility and risk as like as 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 produces around 18-20% (on average) in the last 9 years.
Still, if you invest in Small Cap Mutual funds, then 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 2023. 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.
Base Criteria behind the 10 best small cap mutual funds is, AUM should are
- Minimum 1000 Crores
- More than 5 years in the market.
- Direct Plan – Growth Option
What are the Best Small Cap Mutual Funds in India 2023?
Axis smallcap 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 23.83%. The benchmark index for the fund is S&P BSE smallcap TRI
Here are the Stats, why we ranked Axis small cap direct plan fund as the best small cap mutual funds to invest in 2023
- AUM (Asset Under Management – Rs. 11394.24 Crores
- Expense Ratio – 0.51%%
- 5 Years Performance – 19.81%%
- Performance since Inception – 23.83%
- Percentage of Equity Holding – 82.8%
- Risk vs Category – Moderately Low
Axis Smallcap Fund Direct plan growth is managed by the most experienced fund managers Anupam Tiwari (since Oct 2016) and Vinayak Jayanth (since Jan 2023). This fund has an asset allocation of Equity (82.8%), Debt (16.6%), and Cash (0.7%).
The equity portfolio consists of various sectors like Construction (19.6%), Chemicals (15.8%), Technology (10.7%), Healthcare (12.4%), Financial (11.9%), Metal (6.5%), Consumer Staples (5.5%) Others (17.6%).
Here is the Risk Ratio of the Fund (3 Years Analysis):
- Standard Deviation – 23.53 vs 22.42 (Index)
- Sharp Ratio – 0.87 vs 0.61 (Index)
- Alpha – 1.92 vs 9.17 (Index)
- Beta – 0.81 vs 0.84 (Index)
- R2 – 93.98 vs 41.28 (Index)
checkout our article for a better understanding of the Risk ratios of a mutual fund.
Other Details of the Fund:
- P/E – 25.50
- P/B – 4.2
- Top 5 Equities hold 18% of AUM
- Top 20 Equities hold 52% of AUM
- Exit Load – 1 %if redeemed within 1 year
- Stamp Duty – 0.005%
- Minimum SIP – 100
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 24.43% The benchmark index for the fund is S&P BSE smallcap TRI
Here are the Stats, why we ranked them as the best small cap mutual funds to invest in 2023
- AUM (Asset Under Management – Rs. 23701.28 Crores
- Expense Ratio – 0.86%
- 5 Years Performance – 16.20%
- Performance since Inception – 24.43%%
- Percentage of Equity Holding – 96.50%
- Risk vs Category (5 Years) – Moderately High Risk
Nippon India Small Cap Fund Direct plan growth is managed by the most experienced fund manager Samir Rachh (since Jan 2017). This fund has an asset allocation of Equity (96.7%), Cash (3.3%).
The equity portfolio consists of various sectors like Capital Goods (14.6%), Chemicals (11.6%), Technology (7.3%), Consumer Staples (8.8%), Financial (13.2%), Construction (7.7%), Automobile (6.2%), Services (7.6%), Others (22.4%).
Here is the Risk Ratio of the Fund (5 Years Analysis):
- Standard Deviation – 24.99 vs 19.38 (Index)
- Sharp Ratio – 0.51 vs 0.36 (Index)
- Alpha – 5.54 vs 8.36 (Index)
- Beta – 0.96 vs 0.66 (Index)
- R2 – 97.93 vs 27.70 (Index)
Other Details of the Fund:
- P/E – 21.90
- P/B – 2.90
- Top 5 Equities hold 10% of AUM
- Top 20 Equities hold 30% of AUM
- Exit Load – 1 %if redeemed within 1 year
- Stamp Duty – 0.005%
- Minimum SIP – 100
L&T Emerging Business Fund - Direct Plan - Growth
This 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 May 2014, and since its inception, it has yielded a CAGR of 20.80%. The benchmark index for the fund is S&P BSE smallcap TRI
Here are the Stats, why we ranked them as the best small cap mutual funds to invest in 2023
- AUM (Asset Under Management – Rs. 8166.74 Crores
- Expense Ratio – 0.81%
- 5 Years Performance – 17.39%
- Performance since Inception – 20.80%
- Percentage of Equity Holding – 99.5%
- Risk vs Category (5 Years) – Moderate Risk
L&T Emerging Business Fund Direct plan growth is managed by the most experienced fund managers Venugopal Manghat (since Dec 2019), Vihang Naik (Since Dec 2019), and Alok Rajan (Since Oct 2019). This fund has an asset allocation of Equity (99.5%), Cash (0.5%).
The equity portfolio consists of various sectors like Construction (18.8%), Textiles (12.4%), Metals (11.3%), Engineering (10.7%), Chemicals (10.2%), Technology (10.1%), FMCG (10.1%), Others (16.3%).
Here is the Risk Ratio of the Fund (5 Years Analysis):
- Standard Deviation – 23.67 vs 25.38 (Index)
- Sharp Ratio – 0.60 vs 0.49 (Index)
- Alpha – 2.81 vs 8.25 (Index)
- Beta – 0.91 vs 0.82 (Index)
- R2 – 95.48 vs 18.95 (Index)
Other Details of the Fund:
- P/E – 27.94
- P/B – 3.8
- Top 5 Equities hold 21% of AUM
- Top 20 Equities hold 49% of AUM
- Exit Load – 1 %if redeemed within 1 year
- Stamp Duty – 0.005%
- Minimum SIP – 500
HDFC Smallcap Fund - Direct Plan - Growth
HDFC Smallcap 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 18.47%. The benchmark index for the fund is S&P BSE smallcap TRI
Here are the Stats, why we ranked them as the best small-cap mutual funds to invest in 2023
- AUM (Asset Under Management – Rs. 14649.44 Crores
- Expense Ratio – 0.82%%
- 5 Years Performance – 13.46%
- Performance since Inception – 18.47%
- Percentage of Equity Holding – 93.80%
- Risk vs Category (5 Years) – Moderately high Risk
HDFC Smallcap Fund Direct plan growth is managed by the most experienced fund managers Chirag Setalvad (since Jun 2014), Priya Ranjan (Since may 2022). This fund has an asset allocation of Equity (93.5%), Cash (6.5%).
The equity portfolio consists of various sectors like Services (22.3%), Chemicals (10.9%), Financial (14.2%), Technology (8%), Construction (5.6%), FMCG (6.2%), Automobile (6.1%), Consumer Durable (5.2%), healthcare (5.1%), Others (17.0%).
Here is the Risk Ratio of the Fund (5 Years Analysis):
- Standard Deviation – 28.17 vs 22.42(Index)
- Sharp Ratio – 0.81 vs 0.61 (Index)
- Alpha – 0.21 vs 9.17 (Index)
- Beta – 0.99 vs 0.84 (Index)
- R2 – 96.87 vs 41.48 (Index)
Other Details of the Fund:
- P/E – 15.42
- P/B – 2.13
- Top 5 Equities hold 19% of AUM
- Top 20 Equities hold 51% of AUM
- Exit Load – 1 %if redeemed within 1 year
- Stamp Duty – 0.005%
- Minimum SIP – 100
Kotak Small Cap Fund - Direct Plan - Growth
Kotak 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 19.47%. The benchmark index for the fund is S&P BSE smallcap TRI
Here are the Stats, why we ranked them as the best small cap mutual funds to invest in 2023
- AUM (Asset Under Management – Rs. 8498.04 Crores
- Expense Ratio – 0.59%%
- 5 Years Performance – 16.72%
- Performance since Inception – 19.47%
- Percentage of Equity Holding – 96.80%
- Risk vs Category (5 Years) – Moderate Risk
Kotak Small Cap Fund Direct plan growth is managed by the most experienced fund manager Panjak Tibrewal (since Jan 2013) & Arjun khanna (since mar 2022). This fund has an asset allocation of Equity (96.8%), Cash (3.2%).
The equity portfolio consists of various sectors like Consumer Discretionary (13.2%), Chemials (18.0%), Metal and Mining (11.9%), Capital Goods (11.3%), Construction (8.0%), Consumer Staples (5.7%), Technology (6.1%), Services (8.7%), Others (15.4%).
Here is the Risk Ratio of the Fund (5 Years Analysis):
- Standard Deviation – 26.95 vs 22.42 (Index)
- Sharp Ratio – 0.91 vs 0.61 (Index)
- Alpha – 3.33 vs 9.17 (Index)
- Beta – 0.94 vs 0.84 (Index)
- R2 – 94.81 vs 41.48 (Index)
Other Details of the Fund:
- P/E – 25.08
- P/B – 4.03
- Top 5 Equities hold 18% of AUM
- Top 20 Equities hold 51% of AUM
- Exit Load – 1 %if redeemed within 1 year
- Stamp Duty – 0.005%
- Minimum SIP – 1000
DSP Smallcap Fund - Direct Plan - Growth
DSP Smallcap 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 20.87%. The benchmark index for the fund is S&P BSE smallcap TRI
Here are the Stats, why we ranked them as the best small cap mutual funds to invest in 2023
- AUM (Asset Under Management – Rs. 9160.66 Crores
- Expense Ratio – 0.94%%
- 5 Years Performance – 11.96%%
- Performance since Inception – 20.87%
- Percentage of Equity Holding – 95.60%
- Risk vs Category (5 Years) – moderately high
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 (95.2%), Cash (4.8%).
The equity portfolio consists of various sectors like Chemicals (23.3%), Construction (6.8%), Textiles (5.4%), Automobile (7.6%), Consumer Staples (10.2%), Services (9.0%), Metal and Mining (8.5%), Consumer Discretionary (7.1%), Financial (6.9%), healthcare (7.6%), Others (8.5%).
Here is the Risk Ratio of the Fund (5 Years Analysis):
- Standard Deviation – 26.57 vs 22.42 (Index)
- Sharp Ratio – 0.86 vs 0.61 (Index)
- Alpha – 1.63 vs 9.17 (Index)
- Beta – 0.93 vs 0.84 (Index)
- R2 – 96.69 vs 41.48 (Index)
Other Details of the Fund:
- P/E – 19.37
- P/B – 2.84
- Top 5 Equities hold 17% of AUM
- Top 20 Equities hold 48% of AUM
- Exit Load – 1 %if redeemed within 1 year
- Stamp Duty – 0.005%
- Minimum SIP – 500
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 19.62%. The benchmark index for the fund is S&P BSE smallcap TRI
Here are the Stats, why we ranked them as the best small-cap mutual funds to invest in 2023
- AUM (Asset Under Management – Rs. 7287.57 Crores
- Expense Ratio – 1.04%
- 5 Years Performance – 10.46%
- Performance since Inception – 19.62%
- Percentage of Equity Holding – 96%
- Risk vs Category (5 Years) – Moderately High
Franklin India Small Companies 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 (96.2%), Cash (3.8%).
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 (5 Years Analysis):
- Standard Deviation – 26.81 vs 22.42 (Index)
- Sharp Ratio – 0.76 vs 0.61 (Index)
- Alpha – (-)0.81 vs 9.17 (Index)
- Beta – 0.93 vs 0.84 (Index)
- R2 – 94.93 vs 41.48 (Index)
Other Details of the Fund:
- P/E – 20.93
- P/B – 3.05
- Top 5 Equities hold 17% of AUM
- Top 20 Equities hold 50% of AUM
- Exit Load – 1 %if redeemed within 1 year
- Stamp Duty – 0.005%
- Minimum SIP – 500
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 20.87%. The benchmark index for the fund is S&P BSE smallcap TRI
Here are the Stats, why we ranked them as the best small-cap mutual funds to invest in 2023
- AUM (Asset Under Management – Rs. 4598.77 Crores
- Expense Ratio – 0.81%
- 5 Years Performance – 13.65%
- Performance since Inception – 16.42%
- Percentage of Equity Holding – 92.2%
- Risk vs Category (5 Years) – Moderate High Risk
ICICI Prudential Small Cap Fund Direct plan growth is managed by the most experienced fund managers Priyanka Khandelwal (since Jun 2017), and Harish Bihani (Since Nov 2018). This fund has an asset allocation of Equity (92.2%), Cash (7.8%).
The equity portfolio consists of various sectors like Services (23.7%), Construction (8.7%), Technology (6.9%), Healthcare (14.8%), Engineering (8.5%), Financial (6.7%), Chemicals (11.0%), Automobile (6.6%), Others (11.4%).
Here is the Risk Ratio of the Fund (5 Years Analysis):
- Standard Deviation – 27.67 vs 22.42 (Index)
- Sharp Ratio – 0.84 vs 0.61 (Index)
- Alpha – 2.02 vs 9.17 (Index)
- Beta – 0.94 vs 0.84 (Index)
- R2 – 90.14 vs 41.48 (Index)
Other Details of the Fund:
- P/E – 27.81
- P/B – 3.87
- Top 5 Equities hold 17% of AUM
- Top 20 Equities hold 54% of AUM
- Exit Load – 1 %if redeemed within 1 year
- Stamp Duty – 0.005%
- Minimum SIP – 100
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 16.87%. The benchmark index for the fund is S&P BSE smallcap TRI
Here are the Stats, why we ranked them as the best small cap mutual funds to invest in 2023
- AUM (Asset Under Management – Rs. 2021.28 Crores
- Expense Ratio – 1.01%
- 5 Years Performance – 9.20%
- Performance since Inception – 16.87%
- Percentage of Equity Holding – 94%
- Risk vs Category (5 Years) – High 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 (94%), Cash (6%).
The equity portfolio consists of various sectors like Financial (20.3%), Technology (9.9%), Services (13.7%), Construction (9.1%), Capital Goods (10.4%), Chemicals (7.3%), Automobile (8.3%), Healthcare (6.9%), Consumer Staples (7.6%), Others (6.5%).
Here is the Risk Ratio of the Fund (5 Years Analysis):
- Standard Deviation – 28.02 vs 22.42 (Index)
- Sharp Ratio – 0.76 vs 0.61 (Index)
- Alpha – (-)0.97 vs 9.17 (Index)
- Beta – 0.98 vs 0.84 (Index)
- R2 – 96.35 vs 41.48 (Index)
Other Details of the Fund:
- P/E – 28.87
- P/B – 4.09
- Top 5 Equities hold 15% of AUM
- Top 20 Equities hold 44% of AUM
- Exit Load – 1 %if redeemed within 1 year
- Stamp Duty – 0.005%
- Minimum SIP – 100
Aditya Birla Sun Life Small Cap Fund - Direct Plan - Growth
This small cap fund is one of the top picks from our analysis, as the fund has completed 10 years in market.
The fund was started in Jan 2013, and since its inception, it has yielded a CAGR of 15.36%. The benchmark index for the fund is S&P BSE smallcap TRI
Here are the Stats, why we ranked them as the best small cap mutual funds to invest in 2023
- AUM (Asset Under Management – Rs. 2979.04 Crores
- Expense Ratio – 1.01%
- 5 Years Performance – 5.38%
- Performance since Inception – 15.36%
- Percentage of Equity Holding – 96.90%
- Risk vs Category (5 Years) – Moderate High Risk
Sundaram 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 (98.7%), Cash (1.3%).
The equity portfolio consists of various sectors like Construction (10.0%), Chemicals (8.0%), Consumer Staples (12.0%), Technology (7.4%), Financial (14.5%), Capital Goods (13.2%), Healthcare (5.7%), Services (13.3%), Consumer Discretionary (7.4%), Automobile (8.3%), Metals & Mining (5%), and Others (7.5%).
Here is the Risk Ratio of the Fund (5 Years Analysis):
- Standard Deviation – 28.29 vs 22.42 (Index)
- Sharp Ratio – 0.60 vs 0.61 (Index)
- Alpha – (-)5.68 vs 9.17 (Index)
- Beta – 0.99 vs 0.84 (Index)
- R2 – 96.40 vs 41.48 (Index)
Other Details of the Fund:
- P/E – 28.21
- P/B – 3.37
- Top 5 Equities hold 12% of AUM
- Top 20 Equities hold 38% of AUM
- Exit Load – 1 %if redeemed within 1 year
- Stamp Duty – 0.005%
- Minimum SIP – 1000
Conclusion
- Best Small cap mutual funds invest in the small cap stocks (250-500 Top companies) in India.
- Here is the complete list of best small cap mutual funds in India for 2023.
- 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 advisor, so consult with your equity advisor before choosing any mutal funds.
