Franklin India Small Cap Fund
Direct · GrowthAI Summary
Franklin India Small Cap Fund has delivered a 3Y SIP XIRR of 21.07% and 5Y SIP XIRR of 21.41%, modestly above the 3Y category average of 20.15% but below the 5Y category average of 22.86%. Over longer horizons, the fund shows meaningful lump-sum outperformance versus the NIFTY SmallCap 250, with alpha of 2.59% over 10Y and 4.05% over 12Y. However, recent performance has lagged, with negative alpha of -1.13% over 1Y and -0.66% over 3Y.
The fund exhibits defensive characteristics for a small cap fund, with beta of 0.79-0.91 across horizons and downside capture consistently below upside capture (e.g., 73.03% downside vs 79.67% upside over 15Y). It has experienced 6 drawdown events exceeding 10%, with a maximum drawdown duration of 805 days and a 316-day recovery, reflecting the extended pain typical of small cap investing. Calmar ratios between 0.34 and 0.50 across horizons indicate moderate risk-adjusted efficiency.
The fund holds 80 stocks with a well-diversified top 10 that accounts for only about 18.7% of NAV, led by Kajaria Ceramics (2.43%) and Equitas Small Finance Bank (2.32%). Sector allocation is spread across Banks (11.7%), Auto Components (8.5%), and Consumer Durables (8.2%), with meaningful exposure to financials, healthcare, and capital markets names. No single holding or sector dominates, reducing single-stock concentration risk.
The fund's SIP XIRR trails category averages in the 1Y (15.55% vs 17.64%), 5Y (21.41% vs 22.86%), 7Y (18.36% vs 21.78%), and 10Y (19.64% vs 20.82%) windows, though it leads over 3Y and 12Y. Its long-term alpha generation versus the NIFTY SmallCap 250, rising from 1.89% over 7Y to 5.73% over 15Y, suggests durable stock selection skill. Performance is cyclical, with strong calendar years like 2021 (56.18%) and 2023 (52.78%) offset by weak years like 2018 (-16.25%) and 2025 (-8.25%).
This fund suits investors with a high risk tolerance and a horizon of at least 7 years, given the 805-day maximum drawdown duration and the volatility inherent in small caps. It is appropriate as a satellite allocation within a diversified portfolio rather than a core holding, ideally accessed via SIP to smooth entry points. Investors should be prepared for multi-year stretches of underperformance, such as the negative returns in 2018, 2019, 2025, and 2026 year-to-date.
- Strong long-term alpha versus the NIFTY SmallCap 250, with alpha of 2.59% over 10Y, 4.05% over 12Y, and 5.73% over 15Y
- Defensive downside behavior, with downside capture of 73-83% across horizons consistently below upside capture
- Highly diversified 80-stock portfolio with the top 10 holdings at under 19% of NAV and no sector above 11.7%
- Recent underperformance versus both benchmark and category, with negative alpha of -1.13% over 1Y and SIP XIRR trailing category averages across most windows
- Prolonged drawdown characteristics, including a maximum drawdown duration of 805 days and 6 drawdown events exceeding 10%
Generated on 27-10-2026, 2:14 AM. Verify before investing.
Gives more importance to longer time periods (10Y, 20Y) than shorter ones (1Y, 3Y). This balances out recent outperformance and gives a more realistic picture of what long-term returns might look like.
The largest peak-to-trough decline in the fund's NAV. Shows the worst-case loss an investor would have experienced at any point in the fund's history.
If you invested ₹1,00,000 every month via SIP, here's how this fund has historically performed across different time horizons.
| Duration | Invested | Median Value | XIRR | Min XIRR | Max XIRR |
|---|---|---|---|---|---|
| 1 Year | ₹12.00 L | ₹13.00 L | 26.5% | -62.9% | 137.9% |
| 3 Years | ₹36.00 L | ₹49.73 L | 19.9% | -31.4% | 45.5% |
| 5 Years | ₹60.00 L | ₹97.33 L | 18.5% | -15.2% | 40.5% |
| 7 Years | ₹84.00 L | ₹1.62 Cr | 18.3% | -2.2% | 30.3% |
| 10 Years | ₹1.20 Cr | ₹3.27 Cr | 19.6% | 15.1% | 24.0% |
| 12 Years | ₹1.44 Cr | ₹4.73 Cr | 18.6% | 15.1% | 23.3% |
SIP returns vs benchmark & category
Annualised SIP return (XIRR) over each rolling horizon — like-for-like, not lump-sum.
| Duration | Fund SIP XIRR | NIFTY SMALLCAP 250 | Category avg | Fund edge |
|---|---|---|---|---|
| 1 Year | 26.5% | 21.9% | 17.5% | +4.6% |
| 3 Years | 19.9% | 15.2% | 20.1% | +4.7% |
| 5 Years | 18.5% | 14.3% | 22.8% | +4.2% |
| 7 Years | 18.3% | 14.4% | 21.8% | +3.9% |
| 10 Years | 19.6% | 14.0% | 20.8% | +5.6% |
| 12 Years | 18.6% | 13.5% | 19.2% | +5.1% |
| Duration | Mean | Median | Min | Max | Sharpe | Sortino | % Positive | Cat. Mean | Cat. Median |
|---|---|---|---|---|---|---|---|---|---|
| 1 Year | 24.9% | 16.2% | -40.8% | 121.3% | 0.56 | 2.00 | 77% | — | — |
| 3 Years | 20.8% | 21.6% | -13.4% | 49.2% | 1.05 | 3.56 | 92% | — | — |
| 5 Years | 18.7% | 17.1% | -2.4% | 39.3% | 1.30 | 9.43 | 99% | — | — |
| 10 Years | 19.3% | 18.9% | 13.7% | 25.2% | 4.19 | — | 100% | — | — |
Calmar Ratio by Duration
Compared against NIFTY SMALLCAP 250
| Duration | Alpha | Beta | Upside Capture | Downside Capture | Fund CAGR | Bench CAGR |
|---|---|---|---|---|---|---|
| 1 Year | -2.27 | 0.91 | 89.3% | 90.9% | -3.3% | -1.9% |
| 3 Years | -0.70 | 0.82 | 82.8% | 82.5% | 10.7% | 12.4% |
| 5 Years | +2.42 | 0.82 | 83.5% | 80.3% | 14.1% | 12.8% |
| 7 Years | +1.77 | 0.85 | 85.2% | 82.7% | 19.9% | 20.2% |
| 10 Years | +2.58 | 0.81 | 80.8% | 77.5% | 14.1% | 12.7% |
| 12 Years | +3.98 | 0.79 | 79.7% | 75.1% | 15.6% | 12.9% |
| 15 Years | +5.70 | 0.78 | 79.6% | 73.0% | 17.3% | 13.0% |
| # | Stock | % of NAV |
|---|---|---|
| 1 | Kajaria Ceramics Ltd | 2.43% |
| 2 | Equitas Small Finance Bank Ltd | 2.32% |
| 3 | Eris Lifesciences Ltd | 2.00% |
| 4 | Brigade Enterprises Ltd | 2.00% |
| 5 | Metropolis Healthcare Ltd | 1.91% |
| 6 | Angel One Ltd | 1.87% |
| 7 | Hindustan Aeronautics Ltd | 1.85% |
| 8 | PNB Housing Finance Ltd | 1.85% |
| 9 | Deepak Nitrite Ltd | 1.76% |
| 10 | DCB Bank Ltd | 1.74% |