Contents
All small cap funds compared
Largest fund first. Returns are for the direct plan, compound annual, to 16 October 2026. The base expense ratio is what the fund house charges; the total adds brokerage, exchange charges and taxes on the fund's own trades. Returns are after all of it.
| Fund | Base expense ratio, direct | Total expense ratio, direct | Total expense ratio, regular | 1 year | 3 years | 5 years | Average assets |
|---|---|---|---|---|---|---|---|
| Nippon India Small Cap FundNippon India Mutual Fund | 0.52% | 0.68% | 1.39% | 6.32% | 13.68% | 16.73% | ₹80,841 cr |
| HDFC Small Cap FundHDFC Mutual Fund | 0.64% | 0.79% | 1.56% | -4.02% | 9.21% | 12.71% | ₹41,670 cr |
| SBI Small Cap FundSBI Mutual Fund | 0.61% | 0.80% | 1.59% | 4.18% | 10.27% | 11.93% | ₹41,386 cr |
| Quant Small Cap Fundquant Mutual Fund | 0.62% | 0.90% | 1.73% | 11.09% | 16.58% | 17.13% | ₹35,054 cr |
| Bandhan Small Cap FundBandhan Mutual Fund | 0.39% | 0.64% | 1.72% | 9.98% | 22.67% | 17.91% | ₹32,794 cr |
| Axis Small Cap FundAxis Mutual Fund | 0.51% | 0.69% | 1.68% | 6.45% | 13.86% | 14.15% | ₹30,705 cr |
| DSP Small Cap FundDSP Mutual Fund | 0.65% | 0.82% | 1.71% | 17.27% | 16.20% | 16.07% | ₹20,857 cr |
| Kotak Small Cap FundKotak Mahindra Mutual Fund | 0.51% | 0.64% | 1.71% | 2.96% | 10.97% | 10.75% | ₹19,241 cr |
| HSBC Small Cap FundHSBC Mutual Fund | 0.56% | 0.77% | 1.78% | 8.95% | 12.45% | 14.94% | ₹18,453 cr |
| Invesco India Small cap FundInvesco Mutual Fund | 0.41% | 0.64% | 1.84% | 9.02% | 20.50% | 17.56% | ₹15,129 cr |
| Franklin India Small Cap FundFranklin Templeton Mutual Fund | 0.76% | 1.06% | 1.87% | 2.97% | 10.74% | 13.65% | ₹14,646 cr |
| Canara Robeco Small Cap FundCanara Robeco Mutual Fund | 0.48% | 0.73% | 1.88% | 1.60% | 10.65% | 12.22% | ₹14,356 cr |
| Tata Small Cap FundTata Mutual Fund | 0.41% | 0.52% | 1.69% | -0.72% | 10.34% | 13.75% | ₹12,995 cr |
| ICICI Prudential Small Cap FundICICI Prudential Mutual Fund | 0.71% | 1.17% | 2.09% | 2.86% | 10.29% | 12.34% | ₹9,651 cr |
| Motilal Oswal Small Cap FundMotilal Oswal Mutual Fund | 0.55% | 0.85% | 1.92% | 17.33% | – | – | ₹7,883 cr |
| Edelweiss Small Cap FundEdelweiss Mutual Fund | 0.43% | 0.64% | 1.96% | 5.11% | 13.72% | 14.56% | ₹6,986 cr |
| Aditya Birla Sun Life Small Cap FundAditya Birla Sun Life Mutual Fund | 0.77% | 1.07% | 2.00% | 13.68% | 13.92% | 11.60% | ₹6,030 cr |
| Mirae Asset Small Cap FundMirae Asset Mutual Fund | 0.37% | 0.67% | 2.09% | 7.62% | – | – | ₹5,463 cr |
| UTI Small Cap FundUTI Mutual Fund | 0.73% | 1.05% | 2.02% | 2.55% | 12.40% | 13.21% | ₹5,348 cr |
| Mahindra Manulife Small Cap FundMahindra Manulife Mutual Fund | 0.47% | 0.92% | 2.20% | 13.34% | 18.42% | – | ₹5,252 cr |
| Sundaram Small Cap FundSundaram Mutual Fund | 0.73% | 0.99% | 2.02% | 10.23% | 14.91% | 14.37% | ₹4,061 cr |
| ITI Small Cap FundITI Mutual Fund | 0.45% | 0.84% | 2.20% | 16.07% | 21.91% | 16.72% | ₹3,533 cr |
| TRUSTMF Small Cap FundTrust Mutual Fund | 0.45% | 1.50% | 2.84% | 25.81% | – | – | ₹3,204 cr |
| Bank of India Small Cap FundBank of India Mutual Fund | 0.42% | 0.78% | 2.22% | 27.08% | 20.35% | 18.28% | ₹3,105 cr |
| Union Small Cap FundUnion Mutual Fund | 0.77% | 1.08% | 2.17% | 17.86% | 15.21% | 15.52% | ₹2,544 cr |
| Bajaj Finserv Small Cap FundBajaj Finserv Mutual Fund | 0.52% | 0.98% | 2.36% | 13.72% | – | – | ₹2,522 cr |
| Abakkus Small Cap FundAbakkus Mutual Fund | 0.48% | 1.19% | 2.51% | – | – | – | ₹2,469 cr |
| PGIM India Small Cap FundPGIM India Mutual Fund | 0.57% | 0.93% | 2.37% | 8.85% | 14.79% | 11.04% | ₹1,729 cr |
| Helios Small Cap FundHelios Mutual Fund | 0.47% | 0.89% | 2.40% | – | – | – | ₹1,607 cr |
| Baroda BNP Paribas Small Cap FundBaroda BNP Paribas Mutual Fund | 0.79% | 1.20% | 2.44% | 7.49% | – | – | ₹1,294 cr |
| JM Small Cap FundJM Financial Mutual Fund | 0.61% | 0.97% | 2.53% | 13.01% | – | – | ₹900 cr |
| LIC MF Small Cap FundLIC Mutual Fund | 0.80% | 1.28% | 2.61% | 13.21% | 16.40% | 15.60% | ₹797 cr |
| Groww Small Cap FundGroww Mutual Fund | 0.47% | 1.05% | 2.69% | – | – | – | ₹688 cr |
| Quantum Small Cap FundQuantum Mutual Fund | 0.59% | 0.83% | 2.31% | 6.68% | – | – | ₹259 cr |
| Samco Small Cap FundSamco Mutual Fund | 0.79% | 1.93% | 3.37% | – | – | – | ₹196 cr |
| The Wealth Company Small Cap FundThe Wealth Company Mutual Fund | 0.34% | 1.79% | 3.72% | – | – | – | ₹118 cr |
Expense ratios as disclosed on 17 October 2026; brokerage, transaction costs and levies in the total are averages since 1 April, annualised, as AMFI publishes them. Returns: Direct-Growth plan NAVs to 16 October 2026. Average assets: July–September 2026, all plans. All from AMFI. A dash means the fund is too young for the period. The order is by size; it is not a ranking or a recommendation.
What is a small cap fund?
A small cap fund is an equity mutual fund that must keep at least 65% of its assets in shares and equity-related instruments of small cap companies. SEBI sets that minimum in its rules on scheme categories, revised in February 2026, which kept the small cap definition unchanged.
SEBI measures company size by full market value, using a list AMFI publishes every six months. The 100 largest listed companies are large caps, the next 150 (101st to 250th) are mid caps, and every company from the 251st onwards is a small cap. When the list changes, funds have a month to adjust their holdings.
The other 35% or less can go into mid and large companies, cash and money market instruments, and, under the 2026 rules, gold and silver instruments and InvITs. So two small cap funds can look quite different; each fund’s monthly factsheet shows how much of it is in small companies. The 2026 rules also require a fund’s name to match its category, so every fund in the table is called a “Small Cap Fund”.
Why small cap funds rise and fall so sharply
Small companies can grow faster than large ones, which is the case for owning them. They also tend to have narrower businesses, less research coverage and fewer shares traded each day. In a market fall, small cap shares usually drop further than large caps and can take years to recover; in a rally they often rise further.
Most small cap funds measure themselves against the Nifty Smallcap 250 TRI or the BSE 250 SmallCap TRI, which track the companies ranked roughly 251st to 500th by size, with dividends reinvested. Each fund’s factsheet compares its return with its benchmark.
Funds in the category hold different companies, in different proportions, and some keep a sizeable part in mid caps, which is why their returns in the table above drift so far apart.
Liquidity: why a fund’s size matters
Small cap shares trade in small volumes. A fund holding thousands of crores in them may need many days to sell without pushing prices down, which matters if many investors redeem at the same time.
Since March 2024, at SEBI’s direction, fund houses have published regular stress tests for their small cap and mid cap funds. The main figure is how many days the fund would need to sell 25% and 50% of its portfolio, selling every holding in proportion. Larger funds usually need more days. The results, with other risk measures, are on each fund house’s website.
When money comes in faster than a fund can invest it, some fund houses have stopped or capped lump-sum investments in their small cap funds for a while, keeping SIPs open.
Size can also weigh on returns. In our own study, a preliminary sample, the largest small cap funds trailed the category the following year more often than the smallest: Small-cap fund AUM: does size affect returns?
How small cap funds are taxed
Under the Income-tax Act, 2025, which applies from 1 April 2026, a fund counts as equity-oriented if, on average over the year, at least 65% of its money is in listed shares of Indian companies (section 198(8)). Small cap funds hold mostly listed Indian shares and are treated as equity-oriented funds.
- Held 12 months or less: gains are short-term and taxed at 20%.
- Held longer: gains are long-term. The first ₹1.25 lakh a year of long-term gains on equity shares and equity-oriented funds together is tax-free; the rest is taxed at 12.5%.
- Surcharge, where it applies, and 4% cess come on top. STT of 0.001% is charged when you redeem.
For resident investors there is no TDS on capital gains when you redeem; dividend (IDCW) payouts above ₹10,000 in a year have 10% tax deducted. Tax rules change; check your own case with a tax adviser.
SIP or lump sum in a small cap fund?
A SIP buys units every month at that day’s NAV, so you buy more units when prices are low and fewer when they are high. With small caps, whose prices swing widely, that spreads the risk of putting everything in at a peak. It does not prevent losses: a SIP through a falling market still shows a loss until prices recover.
A lump sum does better when prices rise steadily from the day you invest, and worse when a fall follows. A middle path is a systematic transfer plan: park the lump sum in a liquid fund and move a fixed amount into the small cap fund each month. To see what a monthly amount could grow to, try the SIP calculator.
Small cap, mid cap, flexi cap or multi cap?
- Small cap fund: at least 65% in small cap companies, the 251st company onwards.
- Mid cap fund: at least 65% in mid cap companies, the 101st to 250th.
- Large cap fund: at least 80% in the 100 largest companies.
- Multi cap fund: at least 75% in equity, with at least 25% each in large, mid and small caps, so a quarter or more is always in small caps.
- Flexi cap fund: at least 65% in equity, with no limit on company size; the fund manager can move between large, mid and small caps. See flexi cap funds compared.
- Small cap index fund: a passive fund that copies a small cap index such as the Nifty Smallcap 250, usually at a lower cost. Index funds are a separate category and are not in the table above.
Risks to know
- Deep falls: small cap funds can fall far more than the wider market and stay down for years. Money you may need within a few years does not belong here.
- Liquidity: in a sell-off, small cap shares can be hard to sell without moving their price; the stress test shows how exposed each fund is.
- Fund size and inflows: a fund that grows very large has to buy bigger stakes in small companies, or drift towards larger ones.
- Fund manager: stock selection drives most of the difference between funds, so returns depend heavily on the people running the fund.
How to choose a small cap fund
There is no single best small cap fund: each one holds a different mix of companies, and the leader in one year is often not the leader the next. Compare them on these points instead:
- Time horizon: small cap funds suit money you can leave invested for many years, through at least one deep fall.
- How much is really in small caps: the factsheet shows the split between small, mid and large companies.
- Size and liquidity: check the fund’s latest stress test, and whether it has limited lump-sum investments.
- Returns over three and five years: compare them with the fund’s benchmark, and look at how far the fund fell in bad years, not just the average.
- Direct plan: the same portfolio for a lower expense ratio. See direct vs regular plans.
- Expense ratio: compare the direct plans. How the expense ratio works.
- Exit load: many small cap funds charge one if you redeem within the first year; the scheme document gives the terms.
Questions people ask
An equity mutual fund that SEBI requires to keep at least 65% of its assets in shares of small cap companies: those ranked 251st or lower by market value on the list AMFI publishes every six months. The rest can go into larger companies, cash and a few other instruments.
Over the year to 16 October 2026, the direct plans of 31 small cap funds returned between -4.02% and 27.08%, with a median of 8.95%; over three years the median was 13.89% a year and over five years 14.37%. Small cap returns vary widely from year to year, and past returns do not predict future ones.
Yes, they are among the most volatile equity funds. Over the year to 16 October 2026, 2 of the 31 funds had a negative return. Small cap shares tend to fall further than large caps in a market decline and are harder to sell, so these funds suit money you can leave invested for many years.
As equity-oriented funds: gains on units held 12 months or less are taxed at 20%, and long-term gains above ₹1.25 lakh a year (counted with other equity gains) at 12.5%.
There is no single best one. Funds hold different companies, and the top performer changes from year to year. Compare how much each fund holds in small caps, its size and stress test results, its three- and five-year returns against its benchmark, and the direct plan’s expense ratio. This page does not recommend any fund.
A SIP spreads your purchases over time, which lowers the risk of investing everything just before a fall; a lump sum does better if prices rise steadily from the start. Neither prevents losses. A systematic transfer plan from a liquid fund is a middle path for a lump sum.
A small cap index fund copies an index such as the Nifty Smallcap 250, usually at a lower cost, so it earns roughly what the index does, minus costs. An active small cap fund picks its own shares and can do better or worse than the index. Index funds are a separate category and are not in the table on this page.
Related
This page is educational research based on AMFI data. It is not a recommendation to invest in any scheme, or personalised investment advice. Mutual fund investments are subject to market risks; read all scheme related documents carefully. Past returns do not guarantee future returns. Registration granted by SEBI, enlistment with IAASB and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.