Best Small Cap Mutual Funds 2020

Top Performing Small Cap Mutual to Invest in 2020 in India

Small Cap Funds are those mutual funds that invest a larger portion of their funds in equity shares of small-cap companies.

The Securities & Exchange Board of India or SEBI categorizes companies whose market capitalization is in the 251st position or lower in the market as Small Cap. Market Capitalization is defined as the market value of all outstanding shares and is achieved by multiplying the total number of shares outstanding by the market price per share.

Some of the characteristics of a small cap fund are as follows:

  • Higher probability of growth compared to large caps and mid caps
  • Chances of getting outperformed by large caps and mid caps in a weak economy.
  • Higher volatility compared to large caps and mid caps.
  • Suitable for investors with high investment horizon
  • Suitable for investors with very high risk appetite
  • Stocks may turn illiquid in case of selloffs

Top Rated Small Cap Funds for 2020

The following are the top-rated small-cap funds as per ZFunds scoring for the quarter ended 30th June 2020. The funds with the highest ZF Score (refer methodology here) are ranked at the top. Complete list can be seen in the Annexure at the end of this article.

Fund NameZF ScoreAUM(in Rs. Crores)1-Year Return3-Year Return5-Year Return
Nippon India Small Cap Fund7.838,32212.15%2.229.00%
ICICI Prudential Smallcap Fund Growth5.871,1992.09%-2.08%3.02%
Axis Small Cap Fund 7.242,47210.16%7.79%9.04%

Returns as of 13 August 2020

Also Read: Important Tips for Mutual Fund Investment

1. Nippon India Small Cap Fund

A top-performing fund, Nippon India Small-Cap Fund has consistently outperformed its benchmark as well as the category average returns.

The fund has been ranked at the top position due to its highest scores in parameters like concentration, consistency & volatility as per ZFunds ratings. Also, the fund has one of the highest scores in Valuations.

Nippon India Small Cap Fund is a great investment in the Small Cap Category.

  • Rs. 10,000 invested in August 2015 would have been approx. Rs.15,400.
  • Rs. 1,000 invested in monthly SIP since September 2015 would have been approx. Rs. 68,753.

2. ICICI Prudential Smallcap Fund 

Though not a consistent performer, ICICI Small Cap Fund has been ranked at the second position as per ZFunds Ratings for its high valuation score.

Also, the fund has a decent score in the parameter of volatility. With great valuations, the fund is expected to do well in the near term as the market recovers from the pandemic induced fall.

ICICI Prudential Smallcap Fund is a good choice in the Small-Cap Category for long investments.

  • Rs. 10,000 invested in August 2015 would have been approx. Rs.11,600.
  • Rs. 1,000 invested in monthly SIP since September 2015 would have been approx. Rs. 61,909.

3. Axis Small Cap Fund

Launched in 2013, Axis Small Cap Fund has consistently outperformed its benchmark to date by significant margins. 

The fund has made it to the Top 3 because of its high scores across many parameters including Capture Ratio, Risk-adjusted score,& consistency as per ZFunds Ratings.

Axis Small Cap Fund is also an excellent choice for long term investments and has the ability to generate high risk-adjusted returns for its investors.

  • Rs. 10,000 invested in August 2015 would have been approx. Rs.15,400.
  • Rs. 1,000 invested in monthly SIP since September 2015 would have been approx. Rs. 74,137.

More Information:

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Best Small Cap Mutual Funds
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Best Mid Cap Mutual Funds to Invest in India
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