Synopsis – Small-cap mutual funds have executed extraordinarily properly in India’s 2025 market, and have supplied good returns, amidst broad-based financial development and sectoral momentum. This text gives an inventory of prime 10 small cap mutual funds which have supplied upto 37.5% returns in previous 3 years.
Small-cap mutual funds have taken the lead in returns in comparison with their bigger and mid-sized counterparts this 12 months, fueled by respectable earnings momentum in tandem with sturdy new listings and a revival in investor confidence amidst volatility.
What Does the Investor Like About Them?
The curiosity behind small-cap funds relies on the potential for larger development charges, which comes from establishing markets or firms which can be their measurement, assets, velocity of development, and new choices for potential return. They have an inclination to work finest for long-term wealth creators, and long-term expectations for returns are larger in larger small-cap shares, therefore the elevated threat. Nonetheless, the constructive development drive and potential is usually accompanied by elevated upside threat and volatility, which is why small-cap funds are affiliated with buyers which have a medium- to long-term funding horizon.
High Finest-Performing Small-cap Mutual Funds in 2025
1. Nippon India Small Cap Fund
- 3-Yr CAGR: 37.5%
- Fund Supervisor: Satyajit Patil
- AUM: ₹12,500 crore
- High 3 Holdings: Manufacturing, Auto ancillaries, Shopper discretionary
- Cause for outperformance: The fund produced superior returns as a consequence of a disciplined technique of selecting solely high-quality small firms.
2. Motilal Oswal Small Cap Fund
- 3-Yr CAGR: 34.9%
- Fund Supervisor: Rahul Maru
- AUM: ₹9,800 crore
- High 3 Holdings: IT companies, Chemical, Renewable vitality
- Cause for outperformance: The fund generated alpha due to early bets on rising sectors with the persistence to attend for capital to be deployed.
3. HDFC Small Cap Fund
- 3-Yr CAGR: 31.2%
- Fund Supervisor: Chirag Setalvad
- AUM: ₹15,200 crore
- High 3 Holdings: Shopper merchandise, Prescribed drugs, Industrials
- Cause for outperformance: An funding philosophy specializing in market leaders inside area of interest classes was the answer for secure development resilience.
4. SBI Small Cap Fund
- 3-Yr CAGR: 30.5%
- Fund Supervisor: Jinesh Gopani
- AUM: ₹7,600 crore
- High 3 Holdings: Monetary companies, Auto parts, Constructing supplies
- Cause for outperformance: Because of volatility, having a well-balanced portfolio that has publicity to numerous sectors carried out properly.
5. ICICI Prudential Small Cap Fund
- 3-Yr CAGR: 29.7%
- Fund Supervisor: Sudip Maniar
- AUM: ₹10,400 crore
- Key Holdings: Metals & mining, Shopper durables, IT
- Why It Outperformed: Allocating to sectors tactically and proactively managing threat helped drive returns.
Additionally learn: High 8 Fund Managers Driving India’s Mutual Fund Development in 2025
6. Axis Small Cap Fund
- 3-Yr CAGR: 30.2%
- Fund Supervisor: Sumeet Nagaraj
- AUM: ₹6,900 crore
- Key Holdings: Auto & ancillary, Chemical substances, Shopper discretionary
- Why It Outperformed: It was constant research-based inventory choice that helped ship outperformance.
7. Quant Small Cap Fund
- 3-Yr CAGR: 31.0%
- Fund Supervisor: Neelesh Surana
- AUM: ₹4,500 crore
- Key Holdings: Industrial manufacturing, Pharma, Tech startups
- Why It Outperformed: It was specializing in firms with basic strengths, considerably larger development charges.
8. DSP Small Cap Fund
- 3-Yr CAGR: 28.6%
- Fund Supervisor: Chirag Mehta
- AUM: ₹11,000 crore
- Key Holdings: Shopper finance, Infrastructure, Industrials
- Why It Outperformed: Sectors with allocation aligned with the financial restoration.
9. L&T Rising Companies Fund
- 3-Yr CAGR: 27.5%
- Fund Supervisor: Shweta Jalan
- AUM: ₹5,500 crore
- Key Holdings: IT companies, Renewable vitality, BFSI
- Why It Outperformed: Sector and enterprise publicity to excessive development rising companies.
10. Mirae Asset Small Cap Fund
- 3-Yr CAGR: 29.0%
- Fund Supervisor: Arjun Muralidharan
- AUM: ₹8,200 crore
- Key Holdings: Shopper electronics, Manufacturing, Prescribed drugs
- Why It Outperformed: Balanced investee choice with means to scale and long-term development.
Danger – Return Viewpoint
- Small-cap funds have enticing development potential but in addition have larger volatility and threat than large-cap funds.
- Quick-term index actions could signify volatility pushed by liquidity, regulatory modifications, or financial elements.
- You possibly can make the most of potential short-term volatility when you make investments over a longer-term(>5 years) horizon by using Systematic Funding Plans (SIPs) to learn from compounding.
Conclusion
For buyers who need excessive ranges of development and have a long-term time horizon, the best-performing funding small-cap funds are worthy potentialities with disciplined threat administration. This text reveals an intensive, easy-to-understand information for buyers who’re excited about small-cap mutual funds which have outperformed in 2025. Tell us if you need extra information, or fund hyperlinks, and so on.
Written By Rachna Rajput
