Top 10 small-cap funds that dominated returns in the past year

If you’ve got a high-risk appetite and are on the lookout for investment adventures, small-cap mutual funds might just be your golden ticket to a thrilling ride on the financial rollercoaster. In the exciting world of investments, where last year’s Sensex and Nifty50 boasted double-digit returns, small-cap mutual funds stole the show with even more impressive performances.

The Bull Run of 2023

In the spectacular bull run of 2023, retail investors found themselves drawn to the allure of small-cap mutual funds like moths to a flame. Riding the wave of success, these funds outshone their larger counterparts, enticing investors to divert their focus from the safe harbours of debt mutual funds.

According to AMFI data, the total inflows into equity schemes reached a staggering Rs 1,61,573 crore in the calendar year 2023. Now, that’s not just loose change – it’s a testament to the growing fascination with the high-risk, high-reward world of small-cap investing.

Understanding Small Cap Mutual Funds

For those unfamiliar with the term, small-cap mutual funds are a breed of investment schemes with a minimum of 65% exposure to small-cap stocks. Picture this – small-cap stocks are the unsung heroes of the stock market, belonging to companies ranked below the top 250 entities in terms of market capitalization on stock exchanges.

The Rollercoaster Effect

Small-cap mutual funds mirror this experience in the world of finance. When the market is on an upward trajectory, these funds skyrocket, delivering returns that can leave you grinning from ear to ear. However, be warned – when the market takes a nosedive, small-cap mutual funds descend even faster.

The Numbers Tell the Tale

Let’s crunch some numbers to truly grasp the magnitude of the small-cap spectacle.

Source: AMFI

As displayed in the table above, four daring schemes managed to soar beyond the 50% mark in the past year alone. But the adventure doesn’t end there – the remaining six schemes didn’t lag far behind, boasting returns exceeding 40%.

It’s a financial feat that demands attention and invites investors to join the ranks of those reaping the rewards of small-cap investment prowess.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.