The Indian equity market has witnessed a massive erosion in the last 5 months, with key indices Sensex and Nifty falling up to 14% (as of March 6) from their September peaks. Among broader indices, Nifty Small-Cap 100 index has tumbled about 22% from its all-time high hit on December 12, 2025. Similarly, small-cap mutual fund as a category has emerged as the biggest loser in the short-term (1 month, 3 months, 6 months and 1 year) amid market sell-offs, compared with categories like large-cap, mid-cap, flexi-cap and multi-cap.
However, if you look at the returns over 5 years, small-cap funds still outperform their peers.
The top 5 funds across mutual fund categories, which have given the best returns in the last 5 years, include 3 small-cap funds, while one sectoral fund and one ELSS fund. The funds that have been looking weak for the last few months have performed the strongest in the long run.
Also read: Large-Cap Funds: 28 of 33 fail to deliver even 5% returns in 1 year! Check 10 worst-performing schemes
In this story, we will take a look at returns and other features of 5 top-performing mutual funds across categories.
1. Quant Small Cap Fund – Direct Plan
Returns over 5 years (CAGR): 41.72%
At this rate of return, a lump sum investment of Rs 1 lakh 5 years back would have turned into Rs 5,71,756 for investors.
SIP returns (CAGR): 29.96%
An SIP of Rs 10,000 started 5 years back would be worth Rs 12,28,307.
2. Bandhan Small Cap Fund – Direct Plan
Returns over 5 years (CAGR): 33.68%
A lump sum investment of Rs 1 lakh in this fund would have given investors Rs 4,26,979 after 5 years.
SIP returns (CAGR): 27.75%
An SIP of Rs 10,000 started 5 years back would be worth Rs 11,67,048.
3. Nippon India Small Cap Fund – Direct Plan
Returns over 5 years (CAGR): 31.07%
In this fund, a lump sum investment of Rs 1 lakh would be worth Rs 3,86,798 now after 5 years.
SIP returns (CAGR): 26.04%
An SIP of Rs 10,000 started 5 years ago would have turned into Rs 11,21,677.
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