Only five small-cap mutual funds delivered annualised SIP returns of more than 20% over the past decade, highlighting the category's long-term wealth-creation potential. According to latest data from Value Research, Quant Small Cap Fund emerged as the top performer with a 10-year annualised SIP return of 25.92%, followed by Nippon India Small Cap Fund at 22.60%, Axis Small Cap Fund at 20.97%, Union Small Cap Fund at 20.81%, and DSP Small Cap Fund at 20.27%. The small-cap category has demonstrated remarkable consistency, with these funds turning a ₹10,000 monthly SIP into substantial wealth over the decade-long period.
Quant Small Cap Fund secured the top position with a 10-year annualised SIP return of 25.92%, significantly outperforming other small-cap schemes. Nippon India Small Cap Fund followed with a return of 22.60%, while Axis Small Cap Fund delivered 20.97% returns. Union Small Cap Fund maintained its consistent performance across multiple periods, generating 20.81% returns over the decade. The small-cap category has emerged as one of the most rewarding for long-term SIP investors, with these funds demonstrating the ability to reward investors who remained invested through multiple market cycles.
The five-year SIP rankings present a markedly different picture, reflecting the sharp rally in small-cap stocks over the past few years. Bandhan Small Cap Fund topped the category with an annualised SIP return of 23.90%, narrowly ahead of ITI Small Cap Fund at 23.80%, Invesco India Smallcap Fund at 22.87%, and Bank of India Small Cap Fund at 22.13%. These four funds also occupy the top positions in the three-year SIP return rankings, suggesting consistent outperformance during the recent market cycle. Among funds with longer performance history, Union Small Cap Fund continued to feature among the stronger performers over five years, indicating competitive returns despite changing market leadership.
Union Small Cap Fund stands out as the only scheme to feature among the top five across all three-, five-, and 10-year SIP return rankings. The fund ranked fourth over three years with 18.40% returns, fifth over five years at 19.81%, and fourth over 10 years at 20.81%. Several funds that lead the three- and five-year rankings, including Bandhan Small Cap Fund, ITI Small Cap Fund, Invesco India Smallcap Fund, and Bank of India Small Cap Fund, do not yet have complete 10-year performance history. Meanwhile, some of the decade's top wealth creators have slipped lower in shorter-term rankings, underscoring that while staying invested in the category mattered, fund selection also played an important role in long-term wealth creation.
All seven funds maintain base expense ratios of less than 1%, ranging from 0.41% to 0.79%. As reported by Mint, Edelweiss Mid Cap Fund has the lowest base expense ratio at 0.41%, followed by Invesco India Mid Cap Fund at 0.48% and Nippon India Small Cap Fund at 0.52%. Axis Small Cap Fund, Nippon India Growth Mid Cap Fund, and HDFC Mid Cap Fund have expense ratios of 0.55%, 0.58%, and 0.61% respectively. The cost-efficient structure of these funds has contributed significantly to their long-term wealth creation potential for SIP investors.
