These Top 10 Small Cap Mutual Funds Turned ₹1 Lakh Into ₹4.3 Lakh+ in 5 Years as of July 2025

Small cap mutual funds typically invest in companies with smaller market capitalisation and may carry higher risk and return potential compared to large-cap or diversified funds. This article provides data on select small cap schemes as of July 2025, highlighting their past 5-year performance, fund characteristics such as launch date, AUM, expense ratio, and the extent to which initial investments have grown.

Let’s take a look at how some small cap mutual funds have performed over the past 5 years as of July 2025.

Performance of Top 10 Small Cap Mutual Funds Over 5 Years

The table below shows the current value, annualised returns, and investment multiples for a lump sum investment of ₹1 lakh made 5 years ago, as of July 2025.

Note: The mutual funds listed above are selected from the small cap mutual fund universe and are sorted in descending order based on their annualised returns as of July 1, 2025.

NIFTY Smallcap 250 TRI Performance Over 5 Years

The NIFTY Smallcap 250 TRI (Total Returns Index) represents the performance of the top 250 small-cap companies listed on the NSE. As a benchmark, it helps investors gauge how small-cap mutual funds have performed relative to the broader small-cap market.

Over the 5 5 years, as of July 1, 2025, a lump sum investment of ₹1 lakh in this index would have grown to approximately ₹4,54,748, translating to an annualised return of 35.36%. This means the investment multiplied 4.55 times.

Top Small Cap Mutual Funds in July

Quant Small Cap Fund leads the pack with a remarkable 44.85% annualised return and the highest investment multiple of 6.38x. This is followed by Nippon India Small Cap and Bandhan Small Cap, which delivered strong returns above 36%, turning ₹1 lakh into over ₹5 lakh and ₹4.7 lakh, respectively.

Small Cap Mutual Funds with 34–35% Returns

Several funds such as HSBC Small Cap, BOI Small Cap, Franklin India Smaller Companies, Edelweiss Small Cap, and HDFC Small Cap delivered returns around 34.5–35%, with current values hovering between ₹440,000 and ₹453,000.

Despite slightly lower return multiples (4.34x), funds like Canara Robeco Small Cap and Invesco India Small Cap have still outperformed the benchmark. They maintain moderate AUMs and stable expense ratios.

Overall Trends in Small Cap Mutual Funds

Most funds listed maintain a TER (Total Expense Ratio) between 1.4% and 2%, indicating efficient cost structures. The AUMs vary widely, from ₹1,800 crore (BOI Small Cap) to over ₹63,000 crore (Nippon India Small Cap), reflecting different scales of investor participation.

Read More: Top 5 Gold ETFs in July 2025 With 5-Year CAGR of 14% and Above.

Conclusion

The analysis above highlights the performance of select small cap mutual funds over the past 5 years, based on a hypothetical lump sum investment of ₹1 lakh. These funds have delivered significant returns, with several multiplying the initial investment by over 4.3 times.

Investment decisions should not be based solely on historical performance. Investors are advised to consider their risk appetite, investment horizon, and financial goals, and consult a financial advisor before making any investment or redemption decisions.

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 are subject to market risks, read all scheme-related documents carefully.