With the New Year ahead of us, it’s time to identify new investment opportunities. Nowadays, mutual funds are considered to be one of the best investment options for wealth creation. In this post, I will discuss the Top 4 Best Small Cap Mutual Funds to invest in 2021.
Small Cap Mutual Funds have the potential to deliver superior returns over a long period. Therefore, these funds can be a great addition to your portfolio.
Are you looking for best performing small cap mutual funds? If yes, then this post is for you.
Table of Contents
Small Cap Mutual Funds
Small Cap Mutual Funds predominantly invest in small-cap stocks. These mutual fund schemes are extremely risky in the short term. But they have the potential to yield high returns over a long period.
These funds are recommended only to aggressive equity investors with an investment horizon of 7 years or above.
Here, I have selected the best small cap fund schemes (best small cap mf) to invest in 2021.
Methodology used in shortlisting 4 Best Small Cap Mutual Funds
These Top 4 Best Small Cap Mutual Funds to invest in 2021 are shortlisted based on the following factors.
1. Mutual Fund schemes that have generated superior returns in the last 5 and 7 years are considered here.
2. The selected funds have AUM of more than Rs.2000 Cr. Higher AMU indicates that the fund scheme trusted by a large number of investors.
3. Mutual Fund schemes that are rated as Rank-1, Rank-2, and Rank-3 by CRISIL. Rank1 is the highest rank.
4. Funds that are rated as 5 stars and 4 stars (Out of 5) by Value Research are considered here. Higher star rating is better.
Top 4 Best Small Cap Mutual Funds to invest in 2021
Here are the top small cap mutual funds for you.
1. Axis Small Cap Fund
2. SBI Small Cap Fund
3. Nippon India Small Cap Fund
4. Kotak Small Cap Fund
Table of Best Small Cap Mutual Funds 2021
| S. No. | Scheme Name | Returns in Percentage* | ||||
| 1 Year | 3 Years | 5 Years | 7 Years | 10 Years | ||
| 1 | Axis Small Cap Fund | 22.35 | 9.73 | 13.77 | 21.15 | NA |
| 2 | SBI Small Cap Fund | 31.29 | 3.57 | 15.67 | 26.84 | 18.78 |
| 3 | Nippon India Small Cap Fund | 28.7 | 1.03 | 12.18 | 22.29 | 17.1 |
| 4 | Kotak Small Cap Fund | 34.44 | 4.85 | 12.47 | 19.01 | 13.56 |
| Regular Plans – Growth *As on 24/12/2020 Data Source: Value Research | ||||||
Best Small Cap Funds India
Let’s now analyze these 4 top small cap fund schemes to consider for investment in 2021.
Axis Small Cap Fund
The scheme predominantly invests in smaller companies. This fund is ideal for aggressive investors with an investment horizon of 7 years or above. The portfolio of the fund includes names like Galaxy Surfactants, Brigade Enterprises, City Union Bank, MAS Financial Services, and Can Fin Homes.
Details & Performance of the scheme
| Scheme Name | Axis Small Cap Fund |
| Category | Small-Cap |
| Plan Type | Regular Plan – Growth |
| NAV as on 24-Dec-2020 | 38.7000 |
| Assets (AUM) as on 30-Nov-2020 | 3366 Cr |
| Returns in 1 year | 22.35% |
| Returns in 3 years (Annualised) | 9.73% |
| Annualised returns in 5 years | 13.77% |
| Annualised returns in 7 years | 21.15% |
| Returns since launch | 21.08% |
| Expense Ratio as on 30-Nov-2020 | 1.95% |
| 1 Lakh invested 1 year back grown to | 1.22 Lakh |
| 1 Lakh invested 3 years back grown to | 1.32 Lakh |
| One Lakh invested 5 years back grown to | 1.91 Lakh |
| 1 Lakh invested 7 years back grown to | 3.83 Lakh |
| Fund Manager since 06-Oct-2016 | Anupam Tiwari |
| Website | www.axismf.com |
| Value Research Rating | 5 Star |
| CRISIL Rating | Rank-1 |
| Data Source: Value Research Online (As on 24/12/2020) | |
Click here to invest in Axis Small Cap Fund.
Quick Link to Invest in Axis Mutual Funds
SBI Small Cap Fund
The SBI Small Cap Mutual Fund invests in smaller companies. Aggressive investors can invest in this fund for a long-term horizon of 7 years or above. The portfolio of the fund comprises names like JK Cement, Elgi Equipments, City Union Bank, Blue Star, and V-Guard Industries.
Details & Performance of the scheme
| Scheme Name | SBI Small Cap Fund |
| Category | Small-Cap |
| Plan Type | Regular Plan – Growth |
| NAV as on 24-Dec-2020 | 69.7520 |
| Assets (AUM) as on 30-Nov-2020 | 6202 Cr |
| Returns in 1 year | 31.29% |
| Returns in 3 years (Annualised) | 3.57% |
| Annualised returns in 5 years | 15.67% |
| Annualised returns in 7 years | 26.84% |
| Returns in 10 years (Annualised) | 18.78% |
| Returns since launch | 18.76% |
| Expense Ratio as on 30-Nov-2020 | 1.92% |
| 1 Lakh invested 1 year back grown to | 1.31 Lakh |
| 1 Lakh invested 3 years back grown to | 1.11 Lakh |
| One Lakh invested 5 years back grown to | 2.07 Lakh |
| 1 Lakh invested 7 years back grown to | 5.28 Lakh |
| 1 Lakh invested 10 years back grown to | 5.59 Lakh |
| Fund Manager since 16-Nov-2013 | R Srinivasan |
| Website | www.sbimf.com |
| Value Research Rating | 5 Star |
| CRISIL Rating | Rank-2 |
| Data Source: Value Research Online (As on 24/12/2020) | |
Click here for more information about SBI Small Cap Fund.
Nippon India Small Cap Fund
The Nippon India Small Cap Mutual Fund invests in smaller companies. Investors with a risk appetite can invest in this fund for a long term horizon of 7 years or above. The portfolio of the fund comprises names like Deepak Nitrite, Navin Fluorine International, Tube Investments of India, Affle (India), and CreditAccess Grameen.
Details & Performance of the scheme
| Scheme Name | Nippon India Small Cap Fund |
| Category | Small-Cap |
| Plan Type | Regular Plan – Growth |
| NAV as on 24-Dec-2020 | 48.9450 |
| Assets (AUM) as on 24-Dec-2020 | 10398 Cr |
| Returns in 1 year | 28.70% |
| Returns in 3 years (Annualised) | 1.03% |
| Annualised returns in 5 years | 12.18% |
| Annualised returns in 7 years | 22.29% |
| Returns in 10 years (Annualised) | 17.10% |
| Returns since launch | 16.71% |
| Expense Ratio as on 30-Nov-2020 | 1.77% |
| 1 Lakh invested 1 year back grown to | 1.29 Lakh |
| 1 Lakh invested 3 years back grown to | 1.03 Lakh |
| One Lakh invested 5 years back grown to | 1.78 Lakh |
| 1 Lakh invested 7 years back grown to | 4.09 Lakh |
| 1 Lakh invested 10 years back grown to | 4.85 Lakh |
| Fund Manager since 01-Jan-2017 | Samir Rachh |
| Website | www.mf.nipponindiaim.com |
| Value Research Rating | 4 Star |
| CRISIL Rating | Rank-3 |
| Data Source: Value Research Online (As on 24/12/2020) | |
Click here for more information about Nippon India Small Cap Fund.
Kotak Small Cap Fund
The Kotak Small Cap Fund predominantly invests in smaller companies. This fund is ideal for investors with an appetite for risk for an investment horizon of 7 years or above. The portfolio of the fund includes names like Sheela Foam, Supreme Industries, Century Plyboards (India), Ratnamani Metals & Tubes, and JK Cement.
Details & Performance of the scheme
| Scheme Name | Kotak Small Cap Fund |
| Category | Small-Cap |
| Plan Type | Regular Plan – Growth |
| NAV as on 24-Dec-2020 | 97.6930 |
| Assets (AUM) as on 30-Nov-2020 | 2154 Cr |
| Returns in 1 year | 34.44% |
| Returns in 3 years (Annualised) | 4.85% |
| Annualised returns in 5 years | 12.47% |
| Annualised returns in 7 years | 19.01% |
| Returns in 10 years (Annualised) | 13.56% |
| Returns since launch | 15.35% |
| Expense Ratio as on 30-Nov-2020 | 2.14% |
| 1 Lakh invested 1 year back grown to | 1.34 Lakh |
| 1 Lakh invested 3 years back grown to | 1.15 Lakh |
| One Lakh invested 5 years back grown to | 1.80 Lakh |
| One Lakh invested 7 years back grown to | 3.38 Lakh |
| 1 Lakh invested 10 years back grown to | 3.57 Lakh |
| 1 Lakh invested 15 years back grown to | 6.50 Lakh |
| Fund Manager since 21-Jan-2010 | Pankaj Tibrewal |
| Website | www.kotakmf.com |
| Value Research Rating | 4 Star |
| CRISIL Rating | Rank-2 |
| Data Source: Value Research Online (As on 24/12/2020) | |
Click here for more information about Kotak India Small Cap Fund.
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Final Thoughts
Above mentioned small cap mutual funds are shortlisted as the top 4 best small cap mutual funds in terms of returns and other parameters. However, you should not forget that small-cap fund schemes are extremely risky in the short term.
Moreover, investment in equity mutual funds do not guarantee any returns. Past performance of a fund scheme is no guarantee for future performance.
Therefore, select only those schemes for investment that match your investment goals, investment horizon, and risk appetite. Also never overload your investment portfolio with small-cap funds.
Disclaimer: The information in this post (Top 4 Best Small Cap Mutual Funds to invest in 2021) is strictly for general information purposes only. Please consult a financial advisor before making any investment decision.
Also Read: Top 4 Best Mid Cap Mutual Funds to invest in 2021
Also Read: Top 4 Best Large Cap Mutual Funds to invest in 2021