Small-cap index funds track many small companies at once. They follow an index such as Nifty Smallcap 250 or Nifty Smallcap 50. These funds try to match the index return instead of picking individual stocks. Small caps can grow fast but can be volatile. This guide looks at top funds from your list, explains each one simply, and helps you understand short-term and long-term returns.
Top Small-Cap Index Funds
1. Motilal Oswal Nifty Smallcap 250 Index Fund — Direct Growth
Return: 15.02% (3-year)
Motilal Oswal’s fund follows the Nifty Smallcap 250 index, which holds 250 small companies across many sectors. A 15.02% three-year return shows strong past performance for a small-cap index tracker. Because it spreads investments across many firms, your single-stock risk is lower than buying one small company. For long-term investors who can accept big ups and downs, this fund is a solid option to consider.
2. ICICI Prudential Nifty Smallcap 250 Index Fund — Direct Growth
Return: 14.90% (3-year)
ICICI Prudential’s small-cap tracker also follows the Nifty Smallcap 250. A 14.90% return over three years shows consistent tracking of the small-cap segment. Big fund houses often have better systems for tracking an index closely. If you want passive exposure to many small companies with the backing of a large asset manager, this fund is worth looking into for the long term.
3. Nippon India Nifty Smallcap 250 Index Fund — Direct Growth
Return: 14.65% (3-year)
Nippon India’s index fund delivered 14.65% in three years, which is a healthy return for small caps. This fund gives broad access to the small-cap market, letting you capture growth across many firms instead of betting on a few. Over time, such a fund can provide good upside while reducing the risk of any single company causing large losses.
4. Aditya Birla Sun Life Nifty Smallcap 50 Index Fund — Direct Growth
Return: 14.53% (3-year)
This fund tracks the Nifty Smallcap 50, a list of the 50 larger small-cap companies. A 14.53% three-year return is solid. Because it tracks only 50 names, it is more focused than a 250-stock fund and may move more with these bigger small firms. If you prefer a narrower but still diversified small-cap exposure, this Smallcap 50 tracker is a good choice.
5. Axis Nifty Smallcap 50 Index Fund — Direct Growth
Return: 14.51% (3-year)
Axis’s Nifty Smallcap 50 fund returned 14.51% over three years, close to other top Smallcap 50 funds. This shows that the leading small-cap companies have performed well. A Smallcap 50 tracker suits investors who want exposure to the stronger, relatively larger names in the small-cap universe while still keeping diversification.
6. Groww Nifty Smallcap 250 Index Fund — Direct Growth
Return: 6.20% (1-month)
Groww’s fund shows a short-term return of 6.20% in one month. One-month figures reflect recent market moves and can be volatile in small caps. A strong monthly gain may show renewed investor interest or a market rally. Use such short-term data as a momentum check only — combine it with long-term records before making decisions.
7. HDFC Nifty Smallcap 250 Index Fund — Direct Growth
Return: 6.15% (1-month)
HDFC’s Nifty Smallcap 250 fund had 6.15% in one month. This short-term rise shows recent momentum in the small-cap space. HDFC is a large and trusted fund house, and its passive trackers tend to be well run. Remember that good one-month performance does not guarantee long-term returns; it’s best to watch several months or years for consistency.
8. Bandhan Nifty Smallcap 250 Index Fund — Direct Growth
Return: 6.15% (1-month)
Bandhan’s fund also shows a 6.15% monthly gain, matching other 250-index trackers. When many funds tracking the same index show similar one-month returns, it usually means the entire small-cap category moved up. Short-term moves can be strong, but investors should focus on longer periods to judge a fund’s reliability.
9. SBI Nifty Smallcap 250 Index Fund — Direct Growth
Return: 6.14% (1-month)
SBI’s small-cap 250 fund returned 6.14% in one month. SBI funds are easy to find and often have good operational support. While a single month of gain is encouraging, use it alongside longer return data. For new investors, comparing both recent momentum and multi-year returns will help make a better choice.
10. Kotak Nifty Smallcap 250 Index Fund — Direct Growth
Return: 6.11% (1-month)
Kotak’s Nifty Smallcap 250 fund posted 6.11% in one month. Kotak is known for disciplined fund management. A passive index fund like this simply mirrors the index, so its performance follows the whole small-cap market. If you want wide small-cap exposure with reliable fund management, this type of tracker is a sensible option.
11. Edelweiss Nifty Smallcap 250 Index Fund — Direct Growth
Return: 6.06% (1-month)
Edelweiss’s small-cap 250 fund returned 6.06% in one month. This is consistent with other short-term figures you shared. One-month returns are useful for spotting recent trends but should not be used alone to pick a fund. Look at multi-year returns, tracking error, and costs to decide which fund fits your plan.
| Fund Name | Returns (period) |
| Motilal Oswal Nifty Smallcap 250 Index Fund Direct Growth | 15.02% (3-year) |
| ICICI Prudential Nifty Smallcap 250 Index Fund Direct Growth | 14.90% (3-year) |
| Nippon India Nifty Smallcap 250 Index Fund Direct Growth | 14.65% (3-year) |
| Aditya Birla Sun Life Nifty Smallcap 50 Index Fund Direct Growth | 14.53% (3-year) |
| Axis Nifty Smallcap 50 Index Fund Direct Growth | 14.51% (3-year) |
| Groww Nifty Smallcap 250 Index Fund Direct Growth | 6.20% (1-month) |
| HDFC Nifty Smallcap 250 Index Fund Direct Growth | 6.15% (1-month) |
| Bandhan Nifty Smallcap 250 Index Fund Direct Growth | 6.15% (1-month) |
| SBI Nifty Smallcap 250 Index Fund Direct Growth | 6.14% (1-month) |
| Kotak Nifty Smallcap 250 Index Fund Direct Growth | 6.11% (1-month) |
| Edelweiss Nifty Smallcap 250 Index Fund Direct Growth | 6.06% (1-month) |
Quick Guide — How to Read These Returns
- 3-year returns (e.g., ~14–15%) show longer term performance and matter more for long goals.
- 1-month returns (around 6% here) show short swings and momentum only.
- Index funds aim to match an index; most of a fund’s performance comes from the index itself.
- Risk: Small caps are volatile. Expect larger ups and downs than large caps.
Conclusion
Small-cap index funds can give strong returns over time but come with higher risk. From your data, Motilal Oswal, ICICI Prudential, Nippon India, Aditya Birla Sun Life, and Axis show strong 3-year returns near 14–15% — attractive for long-term investors. The other funds show strong one-month gains (~6%), which suggest recent positive momentum. Combine long-term data, fee checks, and your risk comfort before investing. Consider SIPs and a 5–7 year horizon for small-cap exposure.
FAQ
Should I invest based on 1-month returns?
No. One month shows short swings. Use 3- or 5-year returns and consistency.
Which fund looks best long term from this list?
Based on given 3-year data, Motilal Oswal (15.02%) and ICICI Prudential (14.90%) stand out.
How long should I hold small-cap funds?
At least 5–7 years to manage volatility and aim for growth.
Disclaimer: This article is for informational purposes only and is not financial advice — consult a licensed financial advisor before making any investment decisions.
