Best mutual funds: These small-cap funds delivered over 30% annualised returns in past 5 years. Check list

Best mutual funds: When investing in a mutual fund scheme, investors often examine the scheme’s returns and compare them with those of other schemes in the same category.

Although past returns may not continue in the future, investors often base their investment decisions on how a scheme has performed in the past.

Here, we list the past performance of the 10 best-performing small-cap mutual funds, which have delivered an annualised return of 30 per cent.

To put this perspective, an annual return of 30 per cent means that if someone invests ₹1 lakh, this growth rate would allow the investment to become ₹3,71,293 after five years.

Small-cap mutual funds refer to schemes that have invested 65 per cent of their assets in small-cap stocks and the remaining assets in mid-cap or large-cap stocks. As of 30 June 2025, there were 30 small-cap schemes with a total assets under management (AUM) of ₹3,54,550 crore.

As the table above shows, Bandhan Small Cap Fund delivered around 33 per cent annualised return, and HSBC Small Cap Fund gave 32.14 per cent annualised return.

Other schemes that gave high returns (above 30 per cent per annum) include the Bank of India Small Cap Fund, Edelweiss SCF, Tata Small Cap Fund and Nippon India Small Cap Fund.

Meanwhile, retail investors must be aware that past returns do not guarantee future returns. Just because some scheme has delivered good returns in the past does not mean it will continue to perform well in the future as well. Conversely, bad performance in the past does not imply similar performance in the near future.

Additionally, investors can also examine the stress test of small-cap mutual fund schemes before investing in them.

The stress test shows the number of days it would take to liquidate 25 per cent and 50 per cent of the portfolio in case of a stress event. Per Sebi guidelines, mutual funds are supposed to examine the liquidity of portfolios under stress scenarios for their mid-cap and small-cap funds.

Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment-related decision.

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