Last updated 1 July 2026 · vs April 2026 · How the score is calculated
Small-cap mutual funds invest in companies ranked below 250 by market capitalisation. These are the Indian businesses that the market has not yet fully priced in: regional manufacturers, niche consumer brands, small-finance lenders, mid-sized IT services, the lot. Over 10-15 year windows, the BSE Smallcap index has compounded at roughly 15-17% a year, meaningfully faster than the Nifty 50's 12-13%, and that gap is the entire reason this category exists. The volatility, however, is severe. Small-caps fell 65% peak-to-trough in 2008, 45% in March 2020, and 25-30% in the 2022-23 correction. A small-cap fund can give back 2-3 years of returns in 6 months, then take 3-4 years to recover. This category is the single most dangerous part of an Indian retail portfolio if held for the wrong reason (chasing last year's return) or with the wrong horizon (less than 7-10 years). How to read this table. The 5-year column is mandatory; the 7-year or 10-year is even better, if you can find it. Manager quality matters disproportionately in small-caps because the universe is wide, illiquid, and full of value traps. Look for a manager with a 5-year return that is meaningfully above the BSE Smallcap index, and a maximum drawdown that is meaningfully below it. If both are true over 5 years, you have a real skill edge. If only the return is above, the manager is taking unrewarded risk.
Each Small Cap fund in the table is scored on a blend of five factors: 1-year, 3-year, and 5-year returns, the 3-year Sharpe ratio, and the 3-year maximum drawdown. The 5-year return carries the heaviest weight; the 1-year return carries the lightest, because a single year is mostly noise. Funds with less than three years of history are kept out of the 3Y / 5Y windows but are still listed if they have a 1-year track record.
The underlying NAV data is sourced nightly from the AMFI daily NAV file and the AMC factsheets. The score is re-run every month after the latest upload. Two funds with a score within 5 points of each other are essentially interchangeable for retail purposes; pick from the top 3-5 names in the list, not just the top 1. The full formula, weights, and edge cases are in the rankings methodology post.
| Rank | Scheme | Score |
|---|---|---|
1 | BANK OF INDIA Small Cap Fund Regular Plan Growth Bank of India Mutual Fund · Regular | 73.6 |
2↑2 | Invesco India Smallcap Fund - Regular Plan - Growth Invesco Mutual Fund · Regular | 66.9 |
3↓2 | BANDHAN SMALL CAP FUND - REGULAR PLAN GROWTH Bandhan Mutual Fund · Regular | 65.0 |
4 | ITI Small Cap Fund - Regular Plan - Growth Option ITI Mutual Fund · Regular | 64.8 |
5↓2 | Union Small Cap Fund - Regular Plan - Growth Option Union Mutual Fund · Regular | 60.7 |
Rankings based on data up to 1 July 2026. Direct plans and regular plans are scored separately; this table shows the regular plan of each fund. For educational purposes only, not investment advice. Mutual fund investments are subject to market risks. Read the full disclaimer.
Small-cap funds diverge more than any other category. Some (Nippon, SBI) tilt toward broader small-cap indices; others (Quant, Bandhan) make concentrated bets on 25-30 stocks. The number of holdings and the average market-cap of the book are the two cleanest signals of risk: under 40 stocks or average market-cap below ₹5,000 Cr is a concentrated small-cap.
FinvestR Research Desk
Research team, FinvestR
The FinvestR research desk produces the monthly fund rankings and the underlying scoring engine. The team includes AMFI-registered distributors (ARN-142502) and NISM-Series-V-A certified research analysts. Plain English, no product pitches, full methodology on every page.
AMFI-registered Mutual Fund Distributor · ARN-142502 · NISM-Series-V-A: Mutual Fund Distributors
Last updated 1 July 2026. The full ranking methodology and the data sources are published in the July 2026 rankings post. Past performance does not indicate future results.
Mutual fund investments are subject to market risks. Read all scheme-related documents carefully before investing. FinvestR Capital is registered with AMFI as a Mutual Fund Distributor (ARN-142502). The rankings on this page are research output and not personalised investment advice. Consult a SEBI- registered investment advisor for advice tailored to your situation.