Top 7 Best Small Cap Mutual Funds to invest in India 2019

Top and Best Small Cap Mutual Funds to invest in India 2019Top and Best Small Cap Mutual Funds to invest in India 2019


Midcap and Small cap stocks are showing signs of recovery. Small Cap Mutual Funds gained over 15% in the last 1 month indicating a positive sign. The Small Cap Mutual Fund invests in Small cap stocks in India. If you are a high risk investor, investing in Small Cap Mutual Funds can create amazing wealth in the medium to long term. Which are the Best Small Cap Mutual Funds to invest in 2019 in India? Which are the Top 7 Small Cap mutual funds that have good Crisil Rank and VRO Star Rating? In this article, I have filtered some of the Best Mutual Funds to invest in Small Cap Segment in 2019.

Also Read: Top 10 Largecap Mutual Funds to invest in India 2019

How we picked-up Top 7 Small Cap Mutual Funds to invest in 2019 in India?


These Small Cap mutual funds have been filtered, analyzed and shortlisted based on below key parameters.

1) These mutual funds are picked based on highest returns received in the last 5-10 years, including the years where there was a downturn in stock markets.

2) Smallcap Mutual funds that are rated by Crisil as Rank-1, Rank-2, Rank-3 and Rank-4 are picked for these top funds list which indicates consistent performance in all market cycles.

3) Value research Online (VRO) rated these small-cap funds as 5 star, 4 star and 3 Star. Highest star rating indicates that these funds can perform well compared to its peers in various stock market cycles.

4) We have filtered them baesd on Mutual fund AUM (Assets under management) which have > 700 Crores. This refers that more and more investors are investing in such funds create investor confidence about the future of the fund.

5) Some of the funds would be a repetition from my earlier recommendations as they continue to perform well.

6) Some of the Small Cap funds which we recommended earlier would have been reclassified into diversified funds/other categories post SEBI reclassification of mutual fund schemes in May-2018, hence you might not see such funds in this article now. Some of the funds have been merged with the existing funds post SEBI reclassification of mutual fund schemes last year in 2018, hence past performance may or may not be relevant for them.

Best Small Cap Mutual Funds to invest in 2019 in India


Top#1 – SBI Small Cap Fund


Top and Best Small Cap Mutual Funds to invest in India 2019-SBI Small Cap fund

What is its investment Strategy?

The scheme seeks to provide investors with opportunities for long-term growth in the capital along with the liquidity of an open-ended scheme by investing predominantly in a well diversified basket of equity stocks of small cap companies.

How this Fund Performing now?

This mutual fund scheme gave 20% annualized returns in the last 3 years and 29% annualized returns in the last 5 years. If you would have invested Rs 5,000 per month through SIP for 5 years, the invested value would have been Rs 3 Lakhs (Rs 5,000 x 60 months) and the value of the fund would have grown to Rs 4.5 Lakhs.  Even if you would have invested Rs 1 Lakh lump sum amount 5 years back, it would have grown to Rs 3.5 Lakhs.

Why to invest?

This is one of the consistent performing Small Cap mutual fund schemes in the last 5 years that gave highest SIP returns among this category. This mutual fund risk grade is “Average” and Return Grade is “High”. With VRO rating as a 5 Star (5 is good and 1 is worst) and Crisil as Rank-2 (1 is good and 5 is worst), this is one of the best Small Cap mutual funds to invest in India in 2019.

You may like: Top Midcap Mutual Funds in India

Top#2 – Reliance Small Cap Fund


Top and Best Small Cap Mutual Funds to invest in India 2019-reliance small cap fund

What is its investment Strategy?

The scheme seeks to generate long term capital appreciation by investing predominantly in equity and equity related instruments of small cap companies.

How this Fund Performing now?

This mutual fund scheme gave 19% annualized returns in the last 3 years and 26% annualized returns in the last 5 years. If you would have invested Rs 5,000 per month through SIP for 5 years, the invested value would have been Rs 3 Lakhs (Rs 5,000 x 60 months) and the value of the fund would have grown to Rs 4.25 Lakhs.  Even if you would have invested Rs 1 Lakh lump sum amount 5 years back, it would have grown to Rs 3.2 Lakhs.

Why to invest?

This is one of the best performing Small Cap mutual fund schemes in the last 5 years which gave 2nd highest SIP returns. This mutual fund risk grade is “Average” and Return Grade is “Above Average”. With VRO rating as a 4 Star (5 is good and 1 is worst) and Crisil as Rank-3 (1 is good and 5 is worst), this is one of the Top Small Cap mutual funds to invest in India.

Top#3 – DSP Small Cap Fund


Top and Best Small Cap Mutual Funds to invest in India 2019-dsp small cap fund

What is its investment Strategy?

The aim of the fund is to seek long-term capital appreciation by investing in a portfolio that is substantially constitutes of stocks of small cap companies.

How this Fund Performing now?

This mutual fund scheme gave 24% annualized returns in the last 5 years and 29% annualized returns in the last 10 years. If you would have invested Rs 5,000 per month through SIP for 5 years, the invested value would have been Rs 3 Lakhs (Rs 5,000 x 60 months) and the value of the fund would have grown to Rs 3.8 Lakhs.  Even if you would have invested Rs 1 Lakh lump sum amount 5 years back, it would have grown to Rs 2.9 Lakhs.

Why to invest?

This fund performed well in various market cycles in the last 3-10 years. This mutual fund risk grade is “Average” and Return Grade is “Average”. With VRO rating as a 3 Star (5 is good and 1 is worst) and Crisil as Rank-4 (1 is good and 5 is worst), this is one of the Good small-cap mutual funds to invest in 2019.

Top#4 – Franklin India Smaller Cos Fund


Top and Best Small Cap Mutual Funds to invest in India 2019-franklin india smaller cos fund

What is its investment Strategy?

The Fund seeks to provide long-term capital appreciation by investing predominantly in small companies.

How this Fund Performing now?

This mutual fund scheme gave 22% annualized returns in the last 5 years and 26% annualized returns in the last 10 years. If you would have invested Rs 5,000 per month through SIP for 5 years, the invested value would have been Rs 3 Lakhs (Rs 5,000 x 60 months) and the value of the fund would have grown to Rs 3.8 Lakhs.  Even if you would have invested Rs 1 Lakh lump sum amount 5 years back, it would have grown to Rs 2.6 Lakhs.

Why to invest?

This mutual fund risk grade is “Low” and Return Grade is “Average”. With VRO rating as a 4 Star (5 is good and 1 is worst) and Crisil as Rank-3 (1 is good and 5 is worst), this is one of the best small-cap funds to invest in India for medium to long term.

Top#5 – Aditya Birla Sun Life Small Cap Fund


Top and Best Small Cap Mutual Funds to invest in India 2019-absl small cap fund

What is its investment Strategy?

The Scheme seeks to generate consistent long-term capital appreciation by investing predominantly in equity and equity related securities of Small cap companies.

How this Fund Performing now?

This mutual fund scheme gave 20% annualized returns in the last 5 years and 23% annualized returns in the last 10 years. If you would have invested Rs 5,000 per month through SIP for 5 years, the invested value would have been Rs 3 Lakhs (Rs 5,000 x 60 months) and the value of the fund would have grown to Rs 3.7 Lakhs.  Even if you would have invested Rs 1 Lakh lump sum amount 5 years back, it would have grown to Rs 2.5 Lakhs.

Why to invest?

This mutual fund risk grade is “Above Average” and Return Grade is “Above Average”. With VRO rating as a 3 Star (5 is good and 1 is worst) and Crisil as Rank-3 (1 is good and 5 is worst), this is one of the best Small Cap mutual funds in 2019.

You may also like: 10 High Return Mutual Funds for high risk investors

Top#6 – HDFC Small Cap Fund


Top and Best Small Cap Mutual Funds to invest in India 2019-hdfc small cap fund

What is its investment Strategy?

The scheme seeks to provide long-term capital appreciation /income by investing predominantly in Small-Cap companies.

How this Fund Performing now?

This mutual fund scheme gave 20% annualized returns in the last 5 years and 23% annualized returns in the last 10 years. If you would have invested Rs 5,000 per month through SIP for 5 years, the invested value would have been Rs 3 Lakhs (Rs 5,000 x 60 months) and the value of the fund would have grown to Rs 4.4 Lakhs.  Even if you would have invested Rs 1 Lakh lump sum amount 5 years back, it would have grown to Rs 2.5 Lakhs.

Why to invest?

This fund is the 3rd largest small cap fund that gave highest SIP returns in the last 5 years. This mutual fund risk grade is “Below Average” and Return Grade is “Above Average”. With VRO rating as a 5 Star (5 is good and 1 is worst) and Crisil as Rank-1 (1 is good and 5 is worst), this is one of the best Small Cap mutual funds to invest 2019.

Top#7 – Kotak Small Cap Fund


Top and Best Small Cap Mutual Funds to invest in India 2019-kotak small cap fund

What is its investment Strategy?

The scheme seeks to generate capital appreciation from a diversified portfolio of equity and equity related securities by investing predominantly in small cap companies.

How this Fund Performing now?

This mutual fund scheme gave 19% annualized returns in the last 5 years and 22% annualized returns in the last 10 years. If you would have invested Rs 5,000 per month through SIP for 5 years, the invested value would have been Rs 3 Lakhs (Rs 5,000 x 60 months) and the value of the fund would have grown to Rs 3.7 Lakhs.  Even if you would have invested Rs 1 Lakh lump sum amount 5 years back, it would have grown to Rs 2.4 Lakhs.

Why to invest?

This mutual fund risk grade is “Below Average” and Return Grade is “Average”. With VRO rating as a 3 Star (5 is good and 1 is worst) and Crisil as Rank-3 (1 is good and 5 is worst), this is one of the best Small Cap mutual funds in India for 2019.

Summary of Top 7 Small Cap Mutual Funds to invest in 2019 in India


List of Top and Best Small Cap Mutual Funds to invest in India 2019

Who can invest in these Small Cap Mutual Funds in India?


Any of the following can invest in these small cap funds

1) If you are high risk investor and expecting to create good wealth in medium to long term of 8-10 years, these funds are for you.

2) If you are high risk investor and want to balance your portfolio with other low risk funds like hybrid funds or largecap funds, you can invest in these small cap funds.

3) If you are high risk investor, but not willing to invest in sector funds, you can invest in midcap and small cap funds. You can pick-up some of the small cap funds from above list of funds

Who should NOT invest in Small Cap Mutual Funds?


1) If you are moderate to low risk taker, then you should stay away from such funds.

2) Don’t get tempted with returns given by these funds in the last 1 month. Unless you are a high risk taker and know that these short term gains are temporary and these funds were under performing in the last 6 months to 3 years, you should not invest in these funds.

3) If you are short term to medium term investor of 1 year to 5 years, better to stay away from these funds.

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Suresh

Top 7 Best Small Cap Mutual Funds to invest in India 2019

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