10 best small cap mutual funds that have given over 44% returns in 2023

If you are a investor with a high risk appetite then there are no prizes for guessing that you already have a considerable exposure to small cap mutual funds. Amid the ongoing where Sensex has given over 18 percent return and Nifty50 over 20 percent, small cap mutual funds have given even better returns for obvious reasons.

Thanks to the , retail investors in 2023 were considerably incentivised to vis à vis debt mutual funds. As a result, cumulative inflow into equity funds for the year 2023 (until Nov 30) stood at 1,44,576 crore, more than four times the inflow in debt mutual funds ( 29,470 crore). For the unversed, small cap refer to the schemes, which have a minimum of 65 percent exposure to small cap stocks.

These stocks are the securities of companies ranked below top 250 entities as per market capitalisation on stock exchanges. Small cap are essentially meant for the investors with a high risk appetite since they are more volatile than their larger counterparts. This means when the market is on a rise, small cap mutual funds rise even more.

On the other hand, when the market is on a fall, these mutual funds fall even steeper. These are the top 10 small cap mutual funds of 2023: ( ) As we can see in the table above, four schemes delivered more than 50 percent in the past one year while the remaining six gave more than 40 percent returns.

The schemes top performing small cap mutual fund schemes include , Bandhan Small Cap Fund and . It is also vital to mention that historical returns – albeit important while deciding whether to invest or not – are not a guarantee of future growth potential of a mutual fund scheme. The other factors that should weigh on an investor’s mind at the time of committing an investment include the category of mutual fund scheme, reputation of the fund house, past performance of the fund manager, inherent risk of the scheme, among others.

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