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Small-cap funds have historically delivered the highest returns of any equity category — and the deepest drawdowns. They can fall 40%+ in a bad year. If you have a 7+ year horizon, the stomach to ignore the dips, and you're topping up an already-diversified core, this is where the outsized compounding lives.
Experienced investors with a 7+ year horizon and high risk tolerance, adding a satellite to a diversified core.
Small-cap + flexi-cap = the highest-growth, highest-volatility equity mix. Ranked by 5-year return. Not a starter portfolio.
7+ years
Very High
Direct-plan funds from the Small Cap and Flexi Cap categories, ranked by 5-year return. Past returns don’t predict future ones — use this as a starting shortlist, not a buy list.
| # | Fund | 5Y CAGR |
|---|---|---|
| 1 | Nippon India Small Cap Fund - Direct Plan Growth Plan - Bonus Option Nippon India Mutual Fund | 26.8% |
| 2 | Nippon India Small Cap Fund - Direct Plan Growth Plan - Growth Option Nippon India Mutual Fund | 26.8% |
| 3 | HDFC Flexi Cap Fund - Growth Option - Direct Plan HDFC Mutual Fund | 24.1% |
| 4 | Invesco India Midcap Fund - Direct Plan - Growth Option Invesco Mutual Fund | 23.9% |
| 5 | Kotak Midcap Fund - Direct Plan - Growth Kotak Mahindra Mutual Fund | 22.7% |
| 6 | Sundaram Small Cap Fund Direct Plan - Growth Sundaram Mutual Fund | 22.6% |
| 7 | Franklin India Small Cap Fund - Direct - Growth Franklin Templeton Mutual Fund | 22.2% |
| 8 | DSP Small Cap Fund - Direct Plan - Growth DSP Mutual Fund | 22.2% |
| 9 | Aditya Birla Sun Life Midcap Fund - Growth - Direct Plan Aditya Birla Sun Life Mutual Fund | 20.7% |
| 10 | Kotak Large & Midcap Fund - Direct- Growth Kotak Mahindra Mutual Fund | 20.1% |
| 11 | Kotak-Small Cap Fund - Growth - Direct Kotak Mahindra Mutual Fund | 19.7% |
| 12 | Franklin India Flexi Cap Fund - Direct - Growth Franklin Templeton Mutual Fund | 19.0% |
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Mutual funds in India are regulated by SEBI and managed by AMFI-registered AMCs. Fund performance, ratings, and expense ratios shown are sourced from AMFI / scheme information documents. Past performance is NOT indicative of future returns. NAV fluctuates with market conditions; capital is at risk.
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