Top 5 best small cap mutual funds in 2024

Small-cap funds are equity funds that specifically target small-cap companies, which have a market capitalization lower than Rs. 5000 crore rupees were invested in India. These companies rank far above the top 250, yet they are relatively unknown to us in our everyday experiences. Smaller businesses have the potential to provide great profits, however, they are prone to high fluctuations and could lead to losses in the near future. Here are the top 5 best small cap mutual funds in 2024.

1. HSBC Small Cap Fund

HSBC Small Cap Fund Direct-Growth stands out as one of the best small cap mutual funds in the market. With an With an impressive AUM of Rs 13,981 crore as on December 31, 2023. This 9-year average dividend yield is 0.68%. , like his friends. It recorded a return of 52.02% last year and an average annual return since its inception of 22.61%. Importantly, the investment in this fund more than doubles every three years.

2. HDFC Small Cap Fund

"HDFC Direct Small Cap Fund - Growth, offered by HDFC Mutual Fund, is undoubtedly among the best small cap mutual funds available With 11 years and 1 month of tenure, it manages assets worth Rs 28,607 crore as on December 31, 2023, and positions itself as a leading financial company in its share. . The expense ratio is 0.61%, by industry standards, and provides an option for investors looking for exposure to low prices.

3. Nippon India Small Cap Fund

The Nippon India Small-Cap Fund stands out as one of the best small cap mutual funds in the market. It  has consistently outperformed its benchmark as well as the category average returns. The fund has been ranked among the best funds due to its high scores on various parameters such as concentration, consistency and risk adjusted. Score, Capture Percentage and Volatility as per ZFunds Ratings. The fund also received the highest scores on the important evaluation scale. Nippon India Small Cap Fund is a great investment in the small cap category. The amount invested was approximately INR 10,000/- in December 2015. INR 17,100. INR 1000 invested in SIP per month since January 2016 would have been approx. INR 82,300.

4. Quant Small Cap Fund

Quant Small Cap Fund was established in October 1996 and is known for its momentum-based investment strategies. Quant is one of the best Small Cap mutual Fund takes an aggressive investment approach as it continually seeks attractive opportunities. The Fund does not adhere to standard sectors and metrics. Its small portfolio gives it the advantage of easy liquidation and the ability to quickly shift allocation in line with dynamic market conditions. Although Quant Small Cap Fund's performance during 2019 was below par, the fund has recorded exceptional performance in recent years and rewarded its investors handsomely. The fund's volatility is higher than the category average as well as the benchmark index. However, the fund's impressive returns helped it score high on risk-reward benchmarks. The Quant Small Cap Fund is agile in its approach to shifting allocation between market cap and sectors depending on market conditions, which has helped it generate significant alpha for investors in the fund.

5. Franklin India Smaller Companies Fund

With assets under management amounting to Rs 10,920 crore, Franklin India Smaller Companies Fund is one of the best small cap mutual funds in its category. It boasts the second-highest 1-year return of 44.17% and has delivered a strong performance of 23.75% over the last 10 years.

This fund demonstrates reliability by outperforming the category average in all tenures except for the 5-year tenure. Its significant assets under management and impressive profits place it among the top performers, as it is one of only two funds in this list with over a decade of experience.

Conclusion

As you begin your investment journey in 2024, these 5 Small Cap mutual funds offer a promising combination of performance, stability, and potential for growth. Remember, past performance does not predict future results, so do your research and consider consulting with a financial advisor to make the right decisions about your investments. objective.

FAQs

Q. Which small cap fund gives the highest return?

A. As we can see in the table above, the top-performing small cap fund (Quant Small Cap) has delivered 39.06 percent annualised return in the past 10 years. This is followed by Bank of India Small Cap Fund (31.68%), Nippon India Small Cap Fund (30.88%) and Edelweiss Small Cap Fund (28.50%).

Q. Which SIP gives 30% return?

A. Quant Flexi Cap Fund, Quant Active Fund, and Quant ELSS Tax Saver Fund - a flexi cap, multi cap, and an ELSS fund from Quant Mutual Fund, offered 33.49%, 30.58%, and 34.05% respectively. HDFC Mid-Cap Opportunities Fund, the largest scheme in the mid cap category based on assets managed, offered 30.52%.

Q. How to select a small-cap fund?

A. Make sure to research well and pick a fund with a worthy manager. Expense ratio: A higher expense ratio can eat into your overall returns. On the other hand, a lower expense ratio can help maximise returns. So, remember to compare the expense ratio of multiple funds when making a decision.

Q. Is small cap good to buy now?

A. No, small-cap funds pose a significant risk in short to medium term. However, if they are well-balanced in your investment portfolio, they can provide you with fruitful returns in due time. It is always advisable to research well before you start investing in small-cap funds. 

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