5 small cap funds that have rewarded investors with up to 42% returns in 5 years

Top 5 SIP small cap funds: Systematic investment plans have been a popular choice among retail investors to park their money in mutual funds. Even during market volatility, the right selection of mutual funds can go a long way in helping investors secure desired returns. Small cap mutual funds—or mutual funds focused on the small cap segment on Dalal Street —registered record inflows to the tune of Rs 4,265 crore in August—a fifth straight month of inflows in the category, with the top five schemes rewarding their investors with annual returns of 31-42 per cent.

Small Cap Funds: What are they?

Mutual fund schemes are categorised into large-cap, mid-cap, small-cap, and multi-cap schemes, based on market capitalisation. Funds dedicated in small cap companies that have market cap of less than Rs 500 crore are small cap funds. According to SEBI, small-cap schemes need to invest at least 80 per cent of their total assets in small-cap companies. As per regulations, small cap funds invest in companies starting from the 251st rank in market cap. Small-cap funds carry a high level of risk. However, there is expectation of rapid growth in the business of companies. Fund houses identify companies for investment on the basis of their growth assessment.

Here are top five small cap funds as of September 18, according to data from the AMFI website:

Quant Small Cap Fund

The average SIP return of Quant Small Cap Fund in the last 5 years has been 42.69 percent per annum. The value of monthly investment of Rs 10,000 in this scheme increased to Rs 16.82 lakh in 5 years. The minimum investment in this scheme is Rs 5000. Whereas the minimum SIP is Rs 1000.

Nippon India Small Cap Fund

The average SIP return of Nippon India Small Cap Fund in the last 5 years has been 35.8 percent per annum. The value of monthly investment of Rs 10,000 in this scheme increased to Rs 14.35 lakh in 5 years. The minimum investment in this scheme is Rs 5000. Whereas the minimum SIP is Rs 1000.

HSBC Small Cap Fund

The average SIP return of HSBC Small Cap Fund in 5 years has been 31.82 percent per annum. The value of monthly investment of Rs 10,000 in this scheme increased to Rs 13.08 lakh in 5 years. The minimum investment in this scheme is Rs 5000. Whereas the minimum SIP is Rs 1000.

HDFC Small Cap Fund

The average SIP return of HDFC Small Cap Fund in 5 years has been 31.16 percent per annum. The value of monthly investment of Rs 10,000 in this scheme increased to Rs 12.88 lakh in 5 years. The minimum investment in this scheme is Rs 100. Whereas the minimum SIP is Rs 100.

Union Small Cap Fund

The average SIP return of Union Small Cap Fund in 5 years has been 30.41 percent per annum. The value of monthly investment of Rs 10,000 in this scheme increased to Rs 12.65 lakh in 5 years. The minimum investment in this scheme is Rs 1,000. Whereas the minimum SIP is Rs 1,000.

(Disclaimer: Mutual fund investments are subject to market risks. Zee Business suggests its readers to consult their investment advisers before making any financial decision.)

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