Top 5 Best Small-Cap Mutual Funds with Over 25% Return: Investment of ₹5 Lakh Now Worth ₹27.24 Lakh

The recent stock market turmoil has significantly impacted small-cap stocks, with many declining by up to 50%. As of  February 24, 2025, the small-cap index has dropped by 17.5% year-to-date, affecting the returns of several small-cap mutual funds. However, despite this correction, some funds have demonstrated impressive long-term performance.

For investors looking at historical trends, here is a list of 5 small-cap mutual funds that have delivered over 25% annualised returns in the past 5 years.

5 Top-Performing Small-Cap Mutual Funds Over the Last 5 Year

The table below illustrates how a ₹5 lakh lump sum investment in these funds 5 years ago has grown into a substantial corpus today.

Vale of investment as of February 21, 2025. 

Analysing the Growth Potential

• Quant Small Cap Fund stands out with a staggering 40.39% annualised return, turning a ₹5 lakh investment into ₹27.24 lakh in 5 years.
• Nippon India Small Cap Fund and Bank of India Small Cap Fund have also delivered impressive results, growing the same investment to ₹18.58 lakh and ₹18.20 lakh, respectively.
• Tata Small Cap Fund and Canara Robeco Small Cap Fund have achieved over 28% annualised returns. 

These funds highlight the wealth-creating potential of small-cap mutual funds, despite short-term market volatility.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.