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Mutual fund scorecard: Check out top 5 smallcap schemes with over 25% return in 5 years



Five small cap schemes have offered more than 25% in a five year horizon based on daily rolling returns, data crunching by ETMutualFunds showed. We looked at the daily rolling returns of 19 small cap schemes that have completed five years in the market.

Bank of India Small Cap Fund, the topper in the list, offered 31.01% in a five year horizon. The scheme is benchmarked against Nifty Smallcap 250 – TRI, which offered approximately 10%. Edelweiss Small Cap Fund offered 29.83% against 9.99% by its benchmark (Nifty Smallcap 250 – TRI).


Canara Robeco Small Cap Fund offered 27.39% during the same time period. The scheme is benchmarked against Nifty Smallcap 250 – TRI which offered 10.01%.

Also Read | These 4 equity mutual fund categories offered over 20% returns in 10 years

The other two schemes in the list also managed to beat their respective benchmarks during the same time period.

Nippon India Small Cap Fund, the largest small cap scheme based on assets managed, failed to offer more than 25%. SBI Small Cap Fund, which manages assets of more than Rs 20,000 crore, also failed to offer more than 25%.

The small cap funds offered an average return of around 12.47% in a five year period. Small cap schemes are benchmarked against Nifty Smallcap 100 – TRI, Nifty Smallcap 250 – TRI, and S&P BSE 250 Small Cap – TRI.

All these 19 small cap schemes returns ranging between 8.64 – 31.01% in a five year period.

We considered all the small cap schemes that have been in the market for five years for the study. We considered regular and growth options.

Note, this exercise is not a recommendation. This exercise was just to find small cap schemes that have offered more than 25% returns in a five year horizon.

One should not make investment or redemption decisions based on the above exercise. One should always consider goals, investment horizons, and risk appetite before making investment decisions.

Also Read | Best small cap mutual funds to invest in 2024

Small cap schemes are always considered risky. However, they also have the potential to deliver very high returns over a long period of time. The trouble is these schemes are also notorious for their very long bear phases. When the market gets into a lean phase small cap segments lose heavily as investors look for safer investment options. Small cap companies also have corporate governance issues.

This is why ETMutualFunds do not recommend small cap schemes to new and inexperienced investors. We always tell investors to gain experience and knowledge before investing in small cap schemes. We believe that only investors with a very high risk appetite and stomach for volatility should invest in small cap schemes. They also should have a long investment horizon of, say, seven to 10 years.

If you are looking for recommendations, see: Best small cap mutual funds to invest in 2024



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