Bandhan Small Cap Fund emerged as the standout performer in the small-cap category, delivering ₹10.35 lakh in returns over five years from a ₹10,000 monthly SIP started on August 9, 2021. According to data shared by B. Padmanaban, Founder & Managing Director, Fortune Investment Services, the fund achieved an XIRR of 22.02% on the total investment of ₹6 lakh. ITI Small Cap Fund and Invesco India Smallcap Fund also crossed the ₹10 lakh mark, generating ₹10.25 lakh and ₹10.14 lakh respectively, while Bank of India Small Cap Fund and Union Small Cap Fund delivered ₹9.97 lakh and ₹9.47 lakh respectively.
The performance disparity between top and bottom performers was substantial, with Tata Small Cap Fund recording the lowest returns at ₹8.13 lakh despite generating an XIRR of 12.12%. As reported by Mint, the difference between Bandhan Small Cap and Tata Small Cap was approximately ₹2.23 lakh on the same ₹6 lakh investment. Other underperforming funds included Kotak Small Cap Fund (₹8.15 lakh), SBI Small Cap Fund (₹8.20 lakh), ICICI Prudential Smallcap Fund (₹8.25 lakh), and Canara Robeco Small Cap Fund (₹8.28 lakh).
Small-cap mutual funds are known for their higher growth potential but carry higher volatility and can experience sharp declines during market downturns. According to the analysis, an investor who started a monthly SIP of ₹10,000 in a small-cap fund on August 9, 2021, and continued until August 7, 2026, would have invested ₹6 lakh over the five-year period. The data demonstrates how different small-cap schemes have rewarded investors with varying outcomes, highlighting the importance of fund selection in this category.
