Here's A List Of Top 5 Mutual Funds Delivering Over 40% Returns In One Year

Small cap funds have emerged as the go-to place for investors due to their agility to rise swiftly when markets soar. As the year draws to a close, a spotlight is cast on the top five small cap mutual funds that have excelled, outperforming benchmarks and captivating investors' interest.

1. Mahindra Manulife Small Cap Fund
Leading the pack is the Mahindra Manulife Small Cap Fund, boasting a 54.85% annualized return. The fund has outpaced its benchmark index, the S&P BSE 250 Small cap TRI, by a substantial margin, registering robust growth amidst market volatility. With an asset under management (AUM) of Rs 2,659.59 crore and an expense ratio of 0.14%, this high-risk fund has 94.11% of its investments in equities, with notable holdings in Coal India Ltd, Century Textile & Industries Ltd, and Godrej Industries Ltd.
Investors who took the plunge a year ago with a lump sum of Rs 10,000 are now sitting on a handsome Rs 15,444.30.

2. Bandhan Small Cap Fund
The Bandhan Small Cap Fund from IDFC Mutual Fund secured the second spot with 48.39% returns in the direct plan over the past year. With an AUM of Rs 3,401.93 crore and a reasonable expense ratio of 0.33%, this Crisil 3-star-rated fund has 90.36% of its investments in equities. Notable stocks include Apar Industries, Arvind Ltd, and Rural Electrification Corporation Ltd.
For investors who trusted this fund with Rs 10,000 a year ago, the current value stands at Rs 14,838.90.

3. Franklin India Smaller Companies Fund
Claiming the third spot is the Franklin India Smaller Companies Fund, demonstrating a robust return of 45.44% in the last year. With an AUM of Rs 11,100.65 crore, the fund maintains a Crisil 5-star rating. The expense ratio of 0.99% is slightly higher than the category average, but it is justified by the fund's solid performance. With 92.82% of its investments in equities, Brigade Enterprises Ltd, Equitas Small Finance Bank, and Multi Commodity Exchange of India are among its top holdings.
Investors who chose this fund a year ago with Rs 10,000 now find themselves with an NAV of Rs 160.46.

4. ITI Small Cap Fund
In the fourth position is the ITI Small Cap Fund, managed by ITI Asset Management Ltd, showcasing a commendable return of 45.57% in the last year. With an AUM of Rs 1,913.02 crore and an expense ratio of 0.24%, this fund has 94.53% of its investments in equities. The fund's top holdings include Jindal Stainless Ltd, KPIT Technologies, NCC Ltd, and Kirloskar Oil Engines Ltd.
For those who ventured with a Rs 10,000 lump sum investment a year ago, the current value stands at Rs 14,576.

5. Nippon India Small Cap Fund
Closing the list is the Nippon India Small Cap Fund, securing the fifth position with an AUM of Rs 42,452.51 crore and an impressive return of 42.32% in the last year. With an NAV of Rs 150.17, this fund continues to attract investors with its consistent performance.

The fascination with small cap mutual funds is evident in the recent inflow of Rs 3,699 crore in November, as reported by the Association of Mutual Funds in India (AMFI). The growing interest in small cap funds is fueled by their ability to deliver healthy returns even as the market reaches new peaks.