Investing in small cap mutual funds can generate significant long-term wealth, especially if you choose funds that have consistently delivered high returns. As of 14 July 2025, here are the top 5 small cap mutual funds in India that have given the highest returns in the last 5 years. These funds are ideal for investors targeting wealth creation between 2025 and 2035.
Top 5 Small Cap Mutual Funds Based on 5-Year Returns
- Quant Small Cap Fund (Direct – Growth)
5-Year CAGR: 44.85%
₹1 lakh grew to ₹6.38 lakh - Nippon India Small Cap Fund (Direct – Growth)
5-Year CAGR: 38.12%
₹1 lakh grew to ₹5.03 lakh - Bandhan Small Cap Fund (Direct – Growth)
5-Year CAGR: 36.40% - HSBC Small Cap Fund (Direct – Growth)
5-Year CAGR: 35.28%
₹1 lakh grew to ₹4.53 lakh - Bank of India Small Cap Fund (Direct – Growth)
5-Year CAGR: 35.06%
₹1 lakh grew to ₹4.50 lakh
Comparison Table: Top 5 Small Cap Funds
| Rank | Fund Name | 5-Year CAGR (%) | ₹1 Lakh Value |
|---|---|---|---|
| 1 | Quant Small Cap Fund | 44.85% | ₹6.38 Lakh |
| 2 | Nippon India Small Cap Fund | 38.12% | ₹5.03 Lakh |
| 3 | Bandhan Small Cap Fund | 36.40% | – |
| 4 | HSBC Small Cap Fund | 35.28% | ₹4.53 Lakh |
| 5 | Bank of India Small Cap Fund | 35.06% | ₹4.50 Lakh |
Why These Funds Stand Out
These mutual funds have demonstrated strong performance over the last 5 years, offering returns between 35% to 45% CAGR. Quant Small Cap Fund leads the pack, followed by Nippon India and Bandhan Small Cap Fund. These funds have proven their capability to deliver long-term wealth when held with patience and discipline.
Investment Strategy for 2025–2035
- Start SIPs in top-performing funds like Quant, Nippon India, and Bandhan.
- Diversify across 2 or 3 funds to manage risk effectively.
- Stay invested for at least 10 years to ride out market volatility.
- Review your portfolio once a year and avoid frequent changes.
Final Thoughts
If you’re looking to grow your wealth significantly over the next decade, these top-performing small cap funds offer a compelling opportunity. They carry higher volatility but also the potential for higher returns. A disciplined approach with a long-term mindset can help you benefit from India’s small cap growth story.
Disclaimer: Mutual fund investments are subject to market risks. Please consult a SEBI-registered advisor before investing.
