Investing in smallcap funds can be a thrilling ride, offering the potential for explosive growth—but also carrying higher risks. If you’ve ever wondered which smallcap funds deliver the best long-term wealth creation, this guide is your golden ticket. Over the past five years, a select group of funds has consistently outperformed, turning disciplined monthly SIPs into substantial wealth. For instance, a Rs 12,000 monthly SIP in the top-performing fund has grown into an impressive Rs 15.69 lakh.
In this comprehensive article, we break down the Top 7 Smallcap Funds in 5 Years, providing detailed insights into their performance, NAVs, assets under management (AUM), and projected SIP outcomes. Whether you’re a seasoned investor or a beginner, this guide offers actionable knowledge to make informed investment choices.
Comparison Table of Top 7 Smallcap Funds
| Fund Name | Annualized Return | AUM (Cr) | NAV | SIP Growth (5 Years) |
|---|---|---|---|---|
| Bandhan Small Cap Fund | 27.9% | 15,738 | 51.3 | Rs 15,69,097 |
| Invesco India Smallcap | 25.6% | 8,055 | 46.9 | Rs 14,64,139 |
| Quant Small Cap | 24.6% | 29,288 | 280.5 | Rs 14,21,098 |
| Nippon India Small Cap | 23.9% | 66,136 | 189.4 | Rs 13,91,858 |
| HDFC Small Cap | 22.8% | 36,828 | 161.6 | Rs 13,47,337 |
| Tata Small Cap | 22.3% | 11,637 | 44.7 | Rs 13,27,661 |
| Edelweiss Small Cap | 21.84% | 5,057 | 48.43 | Rs 13,09,860 |
Top 7 Smallcap Funds in 5 Years
Smallcap funds can be the engine for wealth creation if chosen wisely. Here’s a detailed look at the top performers over the last five years.
1. Bandhan Small Cap Fund Direct-Growth
Annualized Return: 27.9%
AUM: Rs 15,738 crore
NAV (as of Oct 10): Rs 51.3
A monthly SIP of Rs 12,000 in Bandhan Small Cap Fund would have grown to Rs 15,69,097 over five years. This fund leads the pack thanks to its smart stock selection and focus on high-growth smallcap companies.
Why it stands out:
- Consistently high returns in volatile markets
- Diversified portfolio with exposure to multiple sectors
- Strong management team with proven expertise
Investor Tip: Bandhan’s fund suits investors with a high-risk appetite seeking long-term wealth creation.
2. Invesco India Smallcap Fund Direct – Growth
Annualized Return: 25.6%
AUM: Rs 8,055 crore
NAV: Rs 46.9
Investing Rs 12,000 per month in this fund would have yielded Rs 14,64,139 over five years. Known for picking emerging companies with strong fundamentals, it’s a favorite among disciplined SIP investors.
Key Highlights:
- Focus on smallcap and microcap segments
- Strong performance during market rebounds
- Active management ensures timely portfolio adjustments
3. Quant Small Cap Fund Direct Plan-Growth
Annualized Return: 24.6%
AUM: Rs 29,288 crore
NAV: Rs 280.5
A monthly SIP here transforms Rs 12,000 into Rs 14,21,098 in five years. The fund emphasizes high-growth potential smallcap stocks, making it a robust choice for investors who can tolerate volatility.
Unique Features:
- Well-diversified across sectors
- Evidence of long-term alpha generation
- Proven track record of picking multi-bagger stocks
4. Nippon India Small Cap Fund Direct- Growth
Annualized Return: 23.9%
AUM: Rs 66,136 crore
NAV: Rs 189.4
Investors could have seen their monthly SIP of Rs 12,000 rise to Rs 13,91,858 over five years. Nippon India Small Cap Fund focuses on fundamentally strong yet undervalued smallcap companies.
Why consider it:
- Large AUM ensures liquidity
- Experienced fund management team
- Balanced risk-return profile for smallcap exposure
5. HDFC Small Cap Fund Direct- Growth
Annualized Return: 22.8%
AUM: Rs 36,828 crore
NAV: Rs 161.6
A five-year SIP of Rs 12,000 would have become Rs 13,47,337. HDFC Small Cap Fund stands out for long-term performance stability and selective investments in growth-driven sectors.
Key Benefits:
- Strong brand trust and fund management
- Focus on companies with scalability
- Consistent SIP growth for long-term wealth creation
6. Tata Small Cap Fund Direct – Growth
Annualized Return: 22.3%
AUM: Rs 11,637 crore
NAV: Rs 44.7
Your Rs 12,000 monthly SIP could have turned into Rs 13,27,661. Tata Small Cap Fund combines careful stock selection with active risk management, making it a top choice for smallcap enthusiasts.
Fund Strengths:
- Invests in emerging smallcap leaders
- Low churn rate for stable growth
- Transparent portfolio disclosures
7. Edelweiss Small Cap Fund Direct – Growth
Annualized Return: 21.84%
AUM: Rs 5,057 crore
NAV: Rs 48.43
A disciplined SIP of Rs 12,000 could have amassed Rs 13,09,860 in five years. Edelweiss emphasizes value-based stock picking and risk-adjusted returns, ideal for patient investors.
Highlights:
- Diversified across sectors and industries
- Focused on sustainable growth companies
- Effective management strategy during market corrections
FAQs About Top 7 Smallcap Funds in 5 Years
Q1: What is the best way to invest in smallcap funds?
A: A systematic investment plan (SIP) is ideal. Regular contributions allow you to harness compounding and reduce market timing risks.
Q2: Are smallcap funds risky?
A: Yes, they are more volatile than largecap funds. However, disciplined long-term investing can yield high returns.
Q3: How much should I invest monthly?
A: There’s no one-size-fits-all. In the examples above, a Rs 12,000 monthly SIP has shown significant wealth creation over five years.
Q4: Can smallcap funds outperform largecap funds?
A: Historically, smallcap funds can outperform in high-growth phases, though they come with higher risk.
Q5: What is NAV in mutual funds?
A: NAV (Net Asset Value) represents the per-unit value of the fund’s assets minus liabilities. It helps track fund performance over time.
Q6: Is Bandhan Small Cap Fund safe for beginners?
A: Beginners can invest but should understand the fund’s volatility and be prepared for short-term fluctuations.
Conclusion
The Top 7 Smallcap Funds in 5 Years demonstrate how smallcap investing, when paired with discipline and patience, can create substantial wealth. From Bandhan’s standout Rs 15.69 lakh SIP growth to Edelweiss’s consistent returns, investors have multiple options to grow their portfolios. Smallcap funds remain a compelling choice for long-term wealth creation, provided investors embrace market swings with a steady mindset.
