Nippon India Small Cap Fund has delivered the strongest long-term performance in its category, consistently rewarding investors who stayed invested for many years. According to data, an investor who started a monthly SIP of just Rs 8,000 around 15 years ago would today be sitting on a fund value close to Rs 1 crore — showing the power of compounding in this scheme.
The fund has not only performed well through SIPs, but has also generated impressive returns for lump-sum investors. Over the long term, the scheme has delivered annualised returns of more than 20%, making it one of the most successful offerings in the small-cap space. It is also the largest fund in the small-cap category by assets under management (AUM).
Strong performance across 3 to 15 years
Launched on 16 September 2010, the scheme from Nippon India Mutual Fund has shown consistently strong performance across all time periods — whether 3 years, 5 years, 10 years or 15 years. Both SIP and lump-sum investors have seen attractive gains, reflecting steady management and the fund’s ability to generate wealth over long horizons.
Lumpsum investors also earned strong returns
Nippon India Small Cap Fund has delivered impressive annualised returns (CAGR) for investors who opted for lumpsum investment. The long-term performance shows how consistently the fund has created wealth across different time horizons.
CAGR returns on lump sum investment
3-year returns: 20.90% (Regular Plan), 21.87% (Direct Plan)
5-year returns: 28.94% (Regular Plan), 30.02% (Direct Plan)
7-year returns: 22.99% (Regular Plan), 24.04% (Direct Plan)
10-year returns: 19.87% (Regular Plan), 21.02% (Direct Plan)
15-year returns: 20.58% (Regular Plan)
The Direct Plan of the scheme was launched on 1 January 2013. Hence, 15-year return data for the Direct Plan is not available.
Strong SIP returns from Nippon India Small Cap Fund
Nippon India Small Cap Fund has also generated attractive annualised returns for investors who preferred the Systematic Investment Plan (SIP) route. The scheme has delivered strong performance across all major time periods.
Annualised SIP returns (CAGR)
3-year returns: 14.87% (Regular Plan), 15.81% (Direct Plan)
5-year returns: 20.64% (Regular Plan), 21.68% (Direct Plan)
7-year returns: 25.57% (Regular Plan), 26.66% (Direct Plan)
10-year returns: 22.18% (Regular Plan), 23.25% (Direct Plan)
15-year returns: 22.98% (Regular Plan)
A monthly SIP of Rs 8,000 over 15 years means a total investment of ₹14.40 lakh. This amount has grown to ₹99,50,832 under the Regular Plan — bringing the investor very close to the Rs 1 crore milestone.
Investment strategy of the fund
The fund managers of Nippon India Small Cap Fund focus on identifying small-cap companies that have the potential to grow into mid-cap firms over the long term. These companies typically carry strong growth prospects, and this strategy helps the fund generate superior long-term returns.
Small-cap stocks include companies that fall below the top 250 listed firms by market capitalisation — essentially those ranked 251 and beyond.
Top 5 sectors in the fund’s portfolio
Consumer Durables: 7.97%
Banks: 6.90%
Industrial Products: 6.44%
Electrical Equipment: 6.35%
Auto Components: 6.09%
Top 5 stocks in the portfolio
Nippon India Small Cap Fund’s portfolio is well-diversified across small- and emerging mid-cap companies. The top 5 holdings are as follows:
MCX: 2.48%
HDFC Bank: 1.90%
SBI: 1.41%
Karur Vysya Bank: 1.34%
Kirloskar Brothers: 1.22%
(Source: Fund Fact Sheet, AMFI, Value Research)
Risk level and expenses
The fund is classified as Very High Risk on the riskometer, reflecting the inherent volatility of small-cap investing. The expense ratio stands at 1.39% for the Regular Plan and 0.63% for the Direct Plan.
As per AMFI data, the fund’s AUM stood at Rs 68,548 crore as of 1 December 2025, making it the largest small-cap fund in India.
Things to keep in mind before investing
Although the Nippon India Small Cap Fund has delivered strong returns across all time periods—from 3 years to 15 years—past performance is not a guarantee of future returns.
Small-cap funds are considered more volatile compared to large-cap and mid-cap schemes. Since this fund carries a Very High Risk rating, investors should carefully assess their risk appetite before investing.
Experts generally advise that small-cap exposure should not exceed 20–25% of your equity portfolio. Investors should consider this category only if they can stay invested for at least 5 years or longer, as short-term fluctuations can be sharp.
(Disclaimer: This article is for informational purposes only and should not be considered investment advice. Make any investment decision only after consulting your financial advisor and reviewing all relevant documents.)
Note: This content has been translated using AI. It has also been reviewed by FE Editors for accuracy.
