Best Small Cap Mutual Funds ti Invest in India

Best Small Cap Mutual Funds to Invest in 2022

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 complete list of the 10 best Small Cap Mutual Funds to invest in India in 2022. We have draft this list post 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 2022?

Axis smallcap Fund Direct plan Growth

Axis 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 December 2013, and since its inception, it has yielded a CAGR of  25.28%. 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 2022

  • AUM (Asset Under Management – Rs. 8410.88 Crores
  • Expense Ratio – 0.36%
  • 5 Years Performance – 22.12%
  • Performance since Inception – 25.28%
  • Percentage of Equity Holding – 89.6%
  • Risk vs Category – Low

Axis Smallcap Fund Direct plan growth is managed by the most experienced fund managers Anupam Tiwari (since Oct 2016) and Hitesh Das (since Dec 2020). This fund has an asset allocation of Equity (89.6%), Debt (10.1%), and Cash (0.3%).

The equity portfolio consists of various sectors like Construction (20.2%), Chemicals (19.9%), Technology (17%), Healthcare (9%), Financial (6.3%), FMCG (5.8%), Metal (5.4%), Others (16.4%).

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

  • Standard Deviation – 20.32 vs 25.38 (Index)
  • Sharp Ratio – 0.85 vs 0.49 (Index)
  • Alpha – 7.79 vs 8.25 (Index)
  • Beta – 0.76 vs 0.82 (Index)
  • R2 – 89.55 vs 18.95 (Index)

checkout our article for a better understanding of the Risk ratios of a mutual fund.

Other Details of the Fund:

  • P/E – 32.99
  • P/B – 4.68
  • Top 5 Equities hold 22% of AUM
  • Top 20 Equities hold 58% of AUM
  • Exit Load – 1 %if redeemed within 1 year
  • Stamp Duty – 0.005%
  • Minimum SIP – 500
Pros
  • 5 and 3 Years Performance is higher than the category average
  • 25.28% returns since Inception, highest among the category
  • Expense Ratio is 0.36%, lowest among the category.
  • Low risk compared to the Category
Cons
  • Last 1 Year returns was low compared to category average

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  25.05%. 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 2022

  • AUM (Asset Under Management – Rs. 18933.35 Crores
  • Expense Ratio – 1.02%
  • 5 Years Performance – 20.58%
  • Performance since Inception – 25.05%
  • Percentage of Equity Holding – 98.1%
  • 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 (98.1%), Cash (1.9%).

The equity portfolio consists of various sectors like Capital Goods (13.5%), Chemicals (13.3%), Technology (11.8%),  Consumer Staples (10.8%), Financial (9.2%), Construction (7.2%), Automobile (6.5%), Services (5.5%), Others (22.4%).

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

  • Standard Deviation – 24.97 vs 25.38 (Index)
  • Sharp Ratio – 0.69 vs 0.49 (Index)
  • Alpha – 5.17 vs 8.25 (Index)
  • Beta – 0.97 vs 0.82 (Index)
  • R2 – 97.94 vs 18.95 (Index)

Other Details of the Fund:

  • P/E – 25.06
  • P/B – 3.16
  • Top 5 Equities hold 13% of AUM
  • Top 20 Equities hold 38% of AUM
  • Exit Load – 1 %if redeemed within 1 year
  • Stamp Duty – 0.005%
  • Minimum SIP – 100
Pros
  • 5 and 3 Years Performance is higher than the category average
  • 25.05% returns since Inception, higher than the category average
  • You can Start investing from Rs. 100 via SIP
Cons
  • Last 1 Year returns was low compared to category average
  • Expense Ratio is 1.02%, higher than the category average.
  • Moderately High risk compared to the Category

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  20.71%. 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 2022

  • AUM (Asset Under Management – Rs. 6810.75 Crores
  • Expense Ratio – 0.49%
  • 5 Years Performance – 20.07%
  • Performance since Inception – 20.71%
  • Percentage of Equity Holding – 93.3%
  • 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). This fund has an asset allocation of Equity (93.3%), Cash (6.7%).

The equity portfolio consists of various sectors like Consumer Discretionary (18.9%), Chemials (16.9%), Metal and Mining (10.4%),  Capital Goods (9.7%), Construction (9.4%), Consumer Staples (7.3%), Technology (6.5%), Services (5.3%), Others (15.4%).

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

  • Standard Deviation – 23.71 vs 25.38 (Index)
  • Sharp Ratio – 0.70 vs 0.49 (Index)
  • Alpha – 5.24 vs 8.25 (Index)
  • Beta – 0.91 vs 0.82 (Index)
  • R2 – 93.81 vs 18.95 (Index)

Other Details of the Fund:

  • P/E – 35.52
  • P/B – 4.74
  • Top 5 Equities hold 21% of AUM
  • Top 20 Equities hold 56% of AUM
  • Exit Load – 1 %if redeemed within 1 year
  • Stamp Duty – 0.005%
  • Minimum SIP – 1000
Pros
  • 5 and 3 Years Performance is higher than the category average
  • 20.71% returns since Inception, higher than the category average
  • Expense Ratio is 0.49%, lower than the category average.
  • Same Fund Manager since inception
Cons
  • Last 1 Year returns was low compared to category average
  • Moderate risk compared to the Category

L&T Emerging Business Fund - Direct Plan - Growth

L&T Emerging Business Fund-Direct Plan-Growth is one of the top picks from our analysis, as the fund nears 8 years of completion. The fund was started in May 2014, and since its inception, it has yielded a CAGR of  20.8%. 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 2022

  • AUM (Asset Under Management – Rs. 8166.74 Crores
  • Expense Ratio – 0.81%
  • 5 Years Performance – 17.39%
  • Performance since Inception – 20.8%
  • 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
Pros
  • 5 and 3 Years Performance is higher than the category average
  • 20.8% returns since Inception, higher than the category average.
Cons
  • Last 1 Year returns was low compared to category average
  • Expense Ratio is 0.81%, higher than the category average.
  • Moderate risk compared to the Category

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  18.44%. 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 2022

  • AUM (Asset Under Management – Rs. 13523.6 Crores
  • Expense Ratio – 0.84%
  • 5 Years Performance – 18%
  • Performance since Inception – 18.44%
  • Percentage of Equity Holding – 95.2%
  • Risk vs Category (5 Years) – Moderate Risk

HDFC Smallcap Fund Direct plan growth is managed by the most experienced fund managers Chirag Setalvad (since Jun 2014), Sankalp Baid (Since Jan 2021). This fund has an asset allocation of Equity (95.2%), Cash (4.8%).

The equity portfolio consists of various sectors like Services (21.7%), Chemicals (16.6%), Engineering (9.3%),  Financial (8.1%), Technology (8%), Construction (6.5%), FMCG (6.2%), Automobile (5.5%), Consumer Durable (5.2%), healthcare (5.1%), Others (7.9%).

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

  • Standard Deviation – 24.32 vs 25.38 (Index)
  • Sharp Ratio – 0.61 vs 0.49 (Index)
  • Alpha – 3.11 vs 8.25 (Index)
  • Beta – 0.93 vs 0.82 (Index)
  • R2 – 95 vs 18.95 (Index)

Other Details of the Fund:

  • P/E – 18.87
  • P/B – 2.49
  • Top 5 Equities hold 23% of AUM
  • Top 20 Equities hold 57% of AUM
  • Exit Load – 1 %if redeemed within 1 year
  • Stamp Duty – 0.005%
  • Minimum SIP – 300
Pros
  • 5 and 3 Years Performance is higher than the category average
  • 18.44% returns since Inception, higher than the category average.
Cons
  • Last 1 Year returns was low compared to category average
  • Expense Ratio is 0.84%, higher than the category average.
  • Moderate risk compared to the Category

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  22.08%. 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 2022

  • AUM (Asset Under Management – Rs. 8793.13 Crores
  • Expense Ratio – 0.99%
  • 5 Years Performance – 14.45%
  • Performance since Inception – 22.06%
  • Percentage of Equity Holding – 97.2%
  • Risk vs Category (5 Years) – Moderately Low

DSP Smallcap Fund Direct plan growth is managed by the most experienced fund managers Vinit Sambre (since Jan 2013), Jay Kothari (Since Mar 2013), and Resham Jain (Since Mar 2018). This fund has an asset allocation of Equity (97.2%), Cash (2.8%).

The equity portfolio consists of various sectors like Chemicals (20.5%), Construction (9.8%), Textiles (9.4%),  Automobile (9.2%), Consumer Staples (8.4%), Services (8%), Metal and Mining (7.2%), Consumer Discretionary (7.1%), Financial (6.5%), healthcare (6.2%), Others (7.7%).

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

  • Standard Deviation – 24.25 vs 25.38 (Index)
  • Sharp Ratio – 0.48 vs 0.49 (Index)
  • Alpha – (-)0.08 vs 8.25 (Index)
  • Beta – 0.94 vs 0.82 (Index)
  • R2 – 95.87 vs 18.95 (Index)

Other Details of the Fund:

  • P/E – 19.37
  • P/B – 3.11
  • 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 – 500
Pros
  • 5 and 3 Years Performance is higher than the category average
  • 22.06% returns since Inception, higher than the category average.
  • Moderately low risk compared to the Category
  • Fund Managers managing since inception
Cons
  • Last 1 Year returns was low compared to category average
  • Expense Ratio is 0.84%, higher than the category average.
  • Alpha is in Negative

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  20.08%. 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 2022

  • AUM (Asset Under Management – Rs. 7208.8 Crores
  • Expense Ratio – 1.03%
  • 5 Years Performance – 12.66%
  • Performance since Inception – 20.08%
  • Percentage of Equity Holding – 96%
  • Risk vs Category (5 Years) – Moderately Low

Franklin India Small Companies Fund Direct plan growth is managed by the most experienced fund managers R Janakiraman (since Jan 2013), and Sandeep Manam (Since Oct 2021). This fund has an asset allocation of Equity (96%), Cash (4%).

The equity portfolio consists of various sectors like Financials (16.6%), Construction (16.4%), Services (11.8%),  Chemicals (9%), Technology (7.3%), Healthcare (7.1%), Consumer Discretionary (6.9%), Consumer Staples (6.3%), Capital Goods (5.5%), Others (12.9%).

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

  • Standard Deviation – 22.75 vs 25.38 (Index)
  • Sharp Ratio – 0.44 vs 0.49 (Index)
  • Alpha – (-)0.85 vs 8.25 (Index)
  • Beta – 0.87 vs 0.82 (Index)
  • R2 – 93 vs 18.95 (Index)

Other Details of the Fund:

  • P/E – 21.38
  • P/B – 2.87
  • Top 5 Equities hold 21% of AUM
  • Top 20 Equities hold 55% of AUM
  • Exit Load – 1 %if redeemed within 1 year
  • Stamp Duty – 0.005%
  • Minimum SIP – 500
Pros
  • 5 and 3 Years Performance is higher than the category average
  • 20.08% returns since Inception, higher than the category average.
  • Moderately low risk compared to the Category
  • Fund Managers managing since inception
Cons
  • Last 1 Year returns was low compared to category average
  • Expense Ratio is 1.03%, higher than the category average.
  • Alpha is in Negative

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  16.63%. 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 2022

  • AUM (Asset Under Management – Rs. 3464.36 Crores
  • Expense Ratio – 0.7%
  • 5 Years Performance – 16.34%
  • Performance since Inception – 16.63%
  • Percentage of Equity Holding – 95.2%
  • Risk vs Category (5 Years) – 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 (95.2%), Cash (4.8%).

The equity portfolio consists of various sectors like Services (23.2%), Construction (12.8%), Technology (10.7%),  Healthcare (8.6%), Engineering (8.5%), Financial (8.2%), Chemicals (8.1%), Automobile (6.6%), Others (13.3%).

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

  • Standard Deviation – 25.19 vs 25.38 (Index)
  • Sharp Ratio – 0.54 vs 0.49 (Index)
  • Alpha – 1.86 vs 8.25 (Index)
  • Beta – 0.95 vs 0.82 (Index)
  • R2 – 90.83 vs 18.95 (Index)

Other Details of the Fund:

  • P/E – 26.39
  • P/B – 3.45
  • Top 5 Equities hold 20% of AUM
  • Top 20 Equities hold 55% of AUM
  • Exit Load – 1 %if redeemed within 1 year
  • Stamp Duty – 0.005%
  • Minimum SIP – 100
Pros
  • 5 and 3 Years Performance is higher than the category average
  • 20.08% returns since Inception, higher than the category average.
  • Expense Ratio is 0.7%, lower than the category average.
  • You can invest with Rs. 100 per month via SIP
Cons
  • Last 1 Year returns was low compared to category average
  • High risk compared to the Category

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  17.47%. 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 2022

  • AUM (Asset Under Management – Rs. 2099.17 Crores
  • Expense Ratio – 0.86%
  • 5 Years Performance – 11.59%
  • Performance since Inception – 17.46%
  • 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 Sudhir Kedia (Since Jan 2022). This fund has an asset allocation of Equity (94%), Cash (6%).

The equity portfolio consists of various sectors like Financial (15.6%), Technology (14.5%), Services (9.7%),  Construction (9.6%), Capital Goods (9.2%), Chemicals (8.2%), Automobile (8.1%), Healthcare (7.5%), Consumer Staples (7.5%), Others (10.1%).

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

  • Standard Deviation – 26.37 vs 25.38 (Index)
  • Sharp Ratio – 0.38 vs 0.49 (Index)
  • Alpha – (-)2.77 vs 8.25 (Index)
  • Beta – 1.02 vs 0.82 (Index)
  • R2 – 96.02 vs 18.95 (Index)

Other Details of the Fund:

  • P/E – 31.27
  • P/B – 3.85
  • Top 5 Equities hold 15% of AUM
  • Top 20 Equities hold 42% of AUM
  • Exit Load – 1 %if redeemed within 1 year
  • Stamp Duty – 0.005%
  • Minimum SIP – 100
Pros
  • 17.46% returns since Inception, higher than the category average.
  • You can invest with Rs. 100 per month via SIP
Cons
  • Last 5, 3, and 1 Year returns was low compared to category average
  • High risk compared to the Category
  • Expense Ratio is 0.86%, higher than the category average.
  • Alpha is negative (Highly Volatile).

Aditya Birla Sun Life Small Cap Fund - Direct Plan - Growth

Aditya Birla Sun Life 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  16.44%. 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 2022

  • AUM (Asset Under Management – Rs. 2927.53 Crores
  • Expense Ratio – 1.03%
  • 5 Years Performance – 10.11%
  • Performance since Inception – 16.44%
  • Percentage of Equity Holding – 98.7%
  • Risk vs Category (5 Years) – High Risk

Sundaram Small Cap Fund Direct plan growth is managed by the most experienced fund managers Kunal Sangoi (since May 2020), Dhaval Gala (Since May 2020), and Nitesh Jain (Since May 2020). This fund has an asset allocation of Equity (98.7%), Cash (1.3%).

The equity portfolio consists of various sectors like Construction (12.1%), Chemicals (11.9%), Consumer Staples (11.3%),  Technology (10.5%), Financial (9.3%), Capital Goods (8.6%), Healthcare (7.8%), Services (7.6%), Consumer Discretionary (7.4%), Automobile (5.9%(, Metals & Mining (5%), and Others (2.6%).

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

  • Standard Deviation – 25.52 vs 25.38 (Index)
  • Sharp Ratio – 0.32 vs 0.49 (Index)
  • Alpha – (-)4.12 vs 8.25 (Index)
  • Beta – 0.98 vs 0.82 (Index)
  • R2 – 95.28 vs 18.95 (Index)

Other Details of the Fund:

  • P/E – 25.08
  • P/B – 3.07
  • Top 5 Equities hold 16% of AUM
  • Top 20 Equities hold 47% of AUM
  • Exit Load – 1 %if redeemed within 1 year
  • Stamp Duty – 0.005%
  • Minimum SIP – 1000
Pros
  • 16.44% returns since Inception, higher than the category average.
  • 3 Years performance is higher than the category average.
Cons
  • Last 5, and 1 Year returns was low compared to category average
  • High risk compared to the Category
  • Expense Ratio is 1.03%, higher than the category average.
  • Alpha is negative (Highly Volatile).

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