87% small cap schemes beat benchmark in five-year horizon

A recent ETMutualFunds analysis revealed that a majority of equity mutual fund schemes failed to beat their benchmarks in the five and seven-year horizons. You can read the story here: 61% equity mutual fund schemes failed to beat benchmarks in five years.

We also found out that around 92% large cap mutual funds failed to beat their benchmark. Read the story: 92% large cap schemes underperformed in five-, seven-year horizon. Most mid cap schemes (74%) were also unable to outperform their benchmarks. Read story: 74% mid cap funds underperformed in seven years; are you investing?. However, most small cap schemes, considered one of the riskiest category, managed beat their benchmarks.

Only around 13% small cap schemes underperformed their benchmarks in the five-year horizon. Only around 14% schemes failed to beat their benchmarks in the seven-year horizon. Note, we are talking about the performance based on the trailing returns.


An analysis of trailing returns in the five years showed that only 2 out of 15 schemes underperformed their benchmarks. In the seven-year horizon, only 2 schemes out of 14 schemes fared poorly.

The rolling returns analysis showed that only 3 out of 15 schemes failed to beat their benchmark in the five-year horizon. In the seven-year horizon, out of 14 schemes, only one scheme underperformed.

The schemes of regular and growth options were taken for the analysis. We looked at each category's trailing and rolling returns to analyse the performance. Here is the list of schemes in the small cap category that have underperformed their benchmarks over the five and seven-year horizon.

Scheme Performance (Trailing returns)			Benchmark Performance
Scheme Name	5 Yrs	7Yrs	Benchmark	5 Yrs	7 Yrs
Aditya Birla SL Small Cap Fund(G)	6.96	12.43	S&P BSE 250 Small Cap - TRI	10.39	14.62
HSBC Small Cap Equity Fund(G)	8.89	12.07	S&P BSE 250 Small Cap - TRI	10.39	14.62

Source :ACE MF, Returns as on 13 September 2022

Scheme Performance (Rolling returns)			Benchmark Performance
Scheme Name	5 Yrs	7Yrs	Benchmark	5 Yrs	7 Yrs
IDBI Small Cap Fund(G)	11.55		Nifty Smallcap 250 - TRI	12.53	13.81
Quant Small Cap Fund(G)	9.62	9.97	Nifty Smallcap 250 - TRI	12.53	13.81
Union Small Cap Fund-Reg(G)	9.52	13.36	S&P BSE 250 Small Cap - TRI	11.37	10.73

Source :ACE MF, Returns as on 13 September 2022

Please note, this is not a recommendation. This is just a comparison based on the performance of these schemes and their current benchmarks. For recommendations, see: Best mutual funds to invest in 2022.