Will small cap mutual funds offer 30-35% in 15 years?

I want to know whether small cap mutual funds would be able to give over 30-35 per cent CAGR for an investment horizon of more than 15 years. I can take high degree of risk. The goal is just to create surplus wealth.
-Rizul Aggrawal

You have an unrealistic return expectation from small cap mutual funds. The small cap category has offered an average return of around 20 per cent in the last 10 years. However, many mutual fund advisors believe it is always safe to assume around 12-15 per cent returns from your equity investments over a long period.

It is always better to choose mutual funds based on your financial goals, investment horizon, and risk profile. Focusing on returns and choosing a mutual fund scheme would spell trouble for you in future. Many investors find it tough to handle the volatility and loss capital when the small cap space goes through a bad phase. Often these investors sell their investments at a loss and flee the market.


Try taking an online quiz to find out your risk profile. That will help you to identify a mutual fund category that matches your risk profile. For example, we recommend large cap mutual funds to conservative equity investors. We recommend multi cap schemes too investors with moderate risk profile, and small and mid cap schemes to investor with very high risk appetite.