Investing in mutual funds is a popular way for Indian investors to grow their wealth over the long term. While large-cap funds offer stability, midcap and smallcap funds present exciting opportunities for higher returns. In this comprehensive guide, we’ll explore the top 5 midcap and smallcap mutual funds in India, offering potential growth prospects for savvy investors.

HDFC Midcap Opportunities Fund:

    • Fund Overview: Managed by HDFC Mutual Fund, this fund aims to provide long-term capital appreciation by investing predominantly in midcap companies.
    • Investment Strategy: The fund follows a bottom-up approach, focusing on high-growth companies with strong fundamentals and scalability potential.
    • Performance: HDFC Midcap Opportunities Fund has consistently outperformed its benchmark and peers over various time periods, delivering impressive returns to investors.
    • Why Invest: With a proven track record and experienced fund management team, HDFC Midcap Opportunities Fund offers an attractive opportunity to capitalize on the growth potential of midcap stocks.

Returns and rankings

Equity Mid Cap
1Y 3Y 5Y All
Fund returns 60.1% 30.1% 24.6% 22.0%
Category average 56.0% 24.2% 22.3% NA
Rank with in category 14 3 8 NA

Nippon India Growth Fund:

    • Fund Overview: Managed by Nippon India Mutual Fund, this fund seeks to generate long-term capital appreciation from a diversified portfolio of emerging companies.
    • Investment Strategy: The fund manager employs a research-driven approach to identify promising midcap and smallcap stocks with the potential for exponential growth.
    • Performance: Kotak Emerging Equity Fund has consistently delivered superior returns compared to its benchmark index, showcasing its ability to identify multibagger stocks.
    • Why Invest: With a focus on emerging sectors and dynamic companies, Nippon India Growth Fund offers investors the opportunity to participate in India’s growth story.

Returns and rankings

Equity Mid Cap
1Y 3Y 5Y All
Fund returns 60.9% 29.3% 25.6% 19.1%
Category average 56.0% 24.2% 22.3% NA
Rank with in category 9 5 6 NA

HDFC Small Cap Fund:

    • Fund Overview: Another offering from HDFC Mutual Fund, this fund aims to achieve capital appreciation by investing predominantly in smallcap companies.
    • Investment Strategy: The fund adopts a bottom-up stock selection approach, focusing on companies with strong growth prospects, sound management, and competitive advantages.
    • Performance: HDFC Small Cap Fund has delivered impressive returns over the years, outperforming its benchmark index and peers in the smallcap category.
    • Why Invest: As smallcap stocks have the potential to generate significant wealth over the long term, HDFC Small Cap Fund provides investors with exposure to promising small-sized companies.

Returns and rankings

Equity Small Cap
1Y 3Y 5Y All
Fund returns 53.0% 32.0% 24.0% 21.2%
Category average 56.4% 27.3% 25.6% NA
Rank with in category 18 4 17 NA

Quant Small Cap Fund:

  • Fund Overview: Managed by Quant Mutual Fund, this fund aims to generate long-term capital appreciation by investing primarily in a diversified portfolio of smallcap stocks.
  • Investment Strategy: The fund manager employs a quantitative approach to stock selection, utilizing mathematical models and algorithms to identify high-potential smallcap companies.
  • Performance: Quant Small Cap Fund has delivered consistent returns over the past 5 years, with an average annual return of 21.8%, making it one of the top performers in the smallcap category.
  • Why Invest: With its focus on small-sized companies poised for growth, Quant Small Cap Fund offers investors an opportunity to benefit from India’s entrepreneurial spirit.

Returns and rankings

Equity Small Cap
1Y 3Y 5Y All
Fund returns 74.2% 41.3% 38.0% 19.9%
Category average 56.4% 27.3% 25.6% NA
Rank with in category 5 1 1 NA

SBI Small Cap Fund:

    • Fund Overview: Managed by SBI Mutual Fund, this fund aims to provide long-term capital appreciation by investing in a diversified portfolio of smallcap stocks.
    • Investment Strategy: The fund manager employs a research-intensive approach to identify undervalued smallcap companies with strong growth prospects and competitive advantages.
    • Performance: SBI Small Cap Fund has delivered consistent returns over the years, outperforming its benchmark index and peers in the smallcap category.
    • Why Invest: With its focus on high-growth smallcap companies, SBI Small Cap Fund offers investors the potential for significant wealth creation over the long term.

Returns and rankings

Equity Small Cap
1Y 3Y 5Y All
Fund returns 42.2% 24.9% 25.8% 26.1%
Category average 56.4% 27.3% 25.6% NA
Rank with in category 30 22 12 NA

Conclusion: Investing in midcap and smallcap mutual funds can be an excellent way to diversify your portfolio and unlock the growth potential of India’s dynamic economy. By choosing the best-performing funds with strong track records and experienced fund managers, investors can position themselves to capitalize on the growth opportunities offered by midcap and smallcap stocks. However, it’s essential to conduct thorough research, consider your investment objectives and risk tolerance before investing in any mutual fund. With the right strategy and a long-term perspective, investors can build wealth steadily and achieve their financial goals.

Please note:

  • GrowWise is not registered with the Securities and Exchange Board of India (SEBI) as an investment advisor, research analyst, or portfolio manager.
  • The information published on this blog is presented for educational purposes only and should not be construed as financial advice.
  • We strongly recommend that you seek the advice of a qualified financial advisor before making any investment decisions.