Top Small Cap Mutual Funds for Highest SIP Returns
When it comes to high returns on equity mutual funds, small-cap mutual funds are usually the first option that comes to mind.
Based on the Securities Exchange Board of India (Sebi) classification of mutual funds, small-cap mutual funds must invest 65% of their money in the stocks of small-cap.
As per the criteria of the Association of Mutual Funds in India (AMFI) , companies ranked higher than 250 on the list of the highest market value companies are classified as small caps firms. Because these companies are in the growth stage, they can expand more quickly than a mid or large-cap company.
This can also help small-cap mutual funds develop more quickly than mid-cap and large-cap mutual funds. However, when the stock market falls, small-cap companies are often the first to decline, making small-cap mutual funds particularly exposed to market volatility. However, in the stock market, higher risk equals higher returns. In accordance with Value Research data, the small-cap mutual fund category has increased by 47.91% in one year, 24.47% in three years, and 32.33% in five.
Here are the top small-cap mutual funds in terms of annualized SIP returns.
Quant Small Cap Fund – Direct Plan
The fund leads the chart with 50.4% annualized SIP returns over 5 years. Its assets under management total Rs.24,530 crore, and its net asset value (NAV) is Rs.293.7817. Since its inception in January 2013, the fund has grown at a CAGR of 20.39% as compared to NIFTY Smallcap 250 TRI.
The fund’s largest holdings in its 84-stock portfolio are RIL, Jio Financial Services, Aeigs Logistics, and Aditya Birla Fashion. An Rs.25,000 monthly SIP in this fund over 5 years, or a total investment of Rs.15 lakh, has grown to Rs.50,01,425 in that time.
Nippon India Small Cap Fund – Direct Plan
In five years, the fund has returned 42.28% on annualized SIPs. It has an AUM of Rs.60,373 crore and a NAV rate of Rs.193.8841. In January 2013, the fund delivered 28.00% annualized returns when compared to the NIFTY Smallcap 250 TRI index.
The fund’s main holdings in its 209-stock portfolio are HDFC Bank, Kirloskar Brothers, Tube Investments, and Apar Industries. A monthly SIP of Rs.25,000 in the fund has increased to Rs.41,67,508 in five years.
Tata Small Cap Fund – Direct Plan
In five years, the fund’s annualized SIP return has been 38.7%. Its asset base is Rs.8,449 crore, with an NAV of Rs.45.1081. Since its inception in November 2018, the fund has returned 29.93% annually as compared to the NIFTY Smallcap 250 TRI.
The fund’s main holdings in its 51-stock portfolio are Basf India, Quess, KIRLPNU, and Godrej Industries. A monthly SIP of Rs.25,000 begun in the fund 5 years ago has grown to Rs.38,39,355.
Bank of India Small Cap Fund – Direct Plan
In 5 years, the fund has returned 39.51% on an annualized SIP basis. The fund’s AUM is Rs.1,341 crore, with an NAV of Rs.52.0800. Since its debut in December 2018, the fund has delivered an annualized return of 34.03% as compared to the NIFTY Smallcap 250 TRI.
Castrol India, Amara Raja Energy, and AMI Organics are the fund’s top three holdings among its 69 stocks. A monthly SIP of Rs.25,000 in the fund has yielded Rs.39,11,673 over 5 years.
Franklin India Smaller Companies Fund – Direct Plan
In 5 years, the fund has provided annualized SIP returns of 38.05%. It has a total asset base of Rs.14,475 crore and a net asset value of Rs.202.1223.
Compared to the NIFTY Smallcap 250 TRI, the fund has returned 23.62% from its inception in January 2013.
Deepak Nitrite, Kalyan Jewellers, Equitas SF Bank, and Karur Vysya Bank are the fund’s top four holdings among its 89 stocks. The person who initiated a Rs.25,000 monthly SIP in the fund has a total of Rs.37,82,194.
