Small cap funds · 5 year performance
Small cap is where active management
has genuinely added value.
Unlike large caps where the index wins overwhelmingly, small cap fund managers have real information edge here. Most funds have beaten the index over 5 years. Choosing the right one still matters — but the odds are in your favour.
19
above the waterline
3
sinking below it
16.8%
Nifty Smallcap 250 return
0.10%
index fund fee
19 out of 22 funds with 5-year track records stayed above water. Active management has genuinely earned its keep in small caps — this is the category where skilled stock-picking makes the biggest difference.
Why small caps are different
Small-cap companies are the least researched in the market. Many have zero analyst coverage. A skilled fund manager with genuine on-the-ground research can find companies growing at 25-30% that the market hasn't noticed yet. That information edge is real — and it shows in the returns. Unlike large caps, this is a category where paying for active management has historically been worth it.
But choosing well still matters
The gap between the best and worst is significant. Bandhan delivered 22.5% over 5 years while ABSL managed 14.1% — that's 8.4% per year of difference. On ₹10 lakh, that's the difference between ₹27.6 lakh and ₹19.3 lakh over 5 years. Most funds beat the index, but the spread between them is wide enough that which one you pick matters a lot.
All small cap funds, side by side.
Sorted by 5-year return. The purity column shows how much of each fund is actually in small caps.
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Returns as of Jan 2026 · Source: AMFI, fund factsheets, Kompound holdings analysis · All returns are CAGR, direct plan, growth option
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