Quant Small Cap Fund vs SBI Small Cap Fund: Which Small Cap Scheme Delivered Higher Returns?

Small cap funds in India are a category of equity mutual funds that primarily make investments in companies ranked 251st and beyond in terms of market capitalisation, as per SEBI’s classification. These are typically emerging businesses with market capitalisations below ₹5,000 crore and often represent high-growth sectors or niche market segments. In this article, we will look at the comparison of two popular small-cap funds: Quant Small Cap Fund and SBI Small Cap Fund.

Quant Small Cap Fund

The Quant Small Cap Fund is tailored for long-term investors aiming for aggressive capital growth through investments primarily in small-cap stocks. It adopts a diversified approach, balancing medium- and long-term investment horizons. The fund focuses on identifying high-growth companies that are often under-researched or less widely held in the market, offering potential for substantial upside. Between March 24, 2020, and April 30, 2025, it delivered an exceptional cumulative return of 794.77%, reflecting its strong performance.

With a portfolio beta of 1.06, the fund carries slightly higher volatility than the broader market, consistent with its high-growth investment profile. While its core objective is to generate long-term capital appreciation through a well-diversified portfolio of small-cap firms, it’s important to note that returns are not guaranteed.

Quant Small Cap Returns

Over longer durations, particularly 3 and 5 years, Quant Small Cap Fund (especially the direct plan) has outperformed the benchmark and Nifty, highlighting strong long-term potential despite short-term volatility.

Value of ₹10,000 invested in Quant Small Cap Fund

Over a 5-year period, the direct plan grew to ₹71,721, significantly higher than both the benchmark and the Nifty, reaffirming the scheme's strong long-term performance. The SI value in the regular plan appears unusually high, possibly indicating a longer inception period or reinvestment effects.

SBI Small Cap Fund

SBI Small Cap Fund is an open-ended Equity Scheme that predominantly invests in small-cap stocks. The scheme provides investors with opportunities for long-term growth in 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.

SBI Small Cap Return (Direct Plan)

The SBI Smallcap Fund has demonstrated a strong long-term performance, with a 5-year CAGR of 29.76% and since since-inception CAGR of 23.96%. However, its 1-year return is nearly flat at 0.23%, indicating recent underperformance compared to its longer-term track record.

The Scheme Benchmark, the BSE 250 Small Cap Index TRI, slightly outperformed the fund over 3 and 5 years, with returns of 18.08% and 33.67% respectively, although it lagged the fund significantly since inception. The Additional Benchmark, the BSE Sensex TRI, showed more stable and consistent returns across periods, with 13.43% over 3 years and 13.50% since inception, but was well behind the SBI Smallcap Fund in long-term performance, reflecting its lower risk and lower volatility profile.

Value of ₹10,000 invested in SBI Small Cap Fund (Direct Plan)

A standard investment of ₹10,000 in the SBI Smallcap Fund has grown to an impressive ₹1,41,300 since inception, illustrating the power of compounding and the fund's historical outperformance in the small-cap space. Over 5 years, the investment would have become ₹36,811, and ₹15,618 over 3 years, despite relatively modest growth to ₹10,023 over the past year.

Compared to the fund, the Scheme Benchmark offered higher returns over 3 and 5 years, growing to ₹16,478 and ₹42,707 respectively, but lagged since inception with a value of ₹51,291. Meanwhile, the BSE Sensex TRI, representing large-cap performance, provided a more conservative growth trajectory, with the investment reaching ₹47,682 since inception, reflecting its stability but lower upside in the long run.

Also Read: From SIP to Wealth: How ₹15,000 a Month Became ₹17+ Lakh in Just 6 Years?

Conclusion

Both the Quant Small Cap Fund and SBI Small Cap Fund have demonstrated strong long-term potential in the small-cap space, though their short-term performances have varied. Quant has delivered aggressive growth, especially over 3- and 5-year periods, with standout cumulative returns and a higher risk-return profile. In contrast, SBI Small Cap Fund, while showing relatively subdued 1-year performance, has exhibited consistent long-term compounding power, with significant growth since inception and a solid track record over 5 years.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.