HDFC Small Cap Fund
Direct · GrowthAI Summary
HDFC Small Cap Fund has delivered strong long-term SIP returns, with XIRR of 20.93% over 3Y, 22.43% over 5Y, and 20.92% over 10Y, broadly in line with or slightly ahead of category averages of 20.25%, 22.89%, and 20.83% respectively. Against the NIFTY SmallCap 250 benchmark, the fund shows positive alpha over longer horizons (5.12% over 12Y, 4.91% over 10Y), though recent performance has lagged, with negative alpha of -8.17% over 1Y and -2.13% over 3Y. The 1Y SIP XIRR of 11.7% trails the category average of 17.78%, indicating recent underperformance against peers.
The fund's beta of roughly 0.80-0.85 across periods shows it moves less than the benchmark, with downside capture consistently below 100% (77-85%), meaning it has historically fallen less than the index in down markets. Six drawdown events exceeding 10% and a maximum drawdown duration of 694 days with a 286-day recovery highlight the extended recovery periods typical of small caps. Calmar ratios of around 0.40-0.43 across most horizons indicate reasonable but not exceptional risk-adjusted returns for the category.
The portfolio holds 83 stocks with a well-diversified top 10 accounting for only about 25% of NAV, led by Firstsource Solutions (3.68%), Aster DM Quality Care (3.37%), and Gabriel India (3.09%). Sector allocation is spread across Auto Components (11.8%), Banks (8.8%), Commercial Services & Supplies (8.3%), and Healthcare Services (8.2%), avoiding excessive concentration in any single sector. The tilt toward financials, healthcare, and auto components provides a balanced mix of cyclical and defensive exposure.
The fund's 3Y XIRR of 20.93% beats the category average of 20.25%, and its 7Y XIRR of 22.66% exceeds the peer average of 21.8%, showing competitive long-term SIP performance. However, it trails peers over 1Y (11.7% vs 17.78%) and 5Y (22.43% vs 22.89%), suggesting recent relative weakness. Its consistent positive alpha over 5Y, 10Y, 12Y, and 15Y horizons versus the benchmark demonstrates durable long-term stock selection despite short-term volatility in relative rankings.
This fund suits investors with high risk tolerance and a long time horizon of 7-10 years or more, as small cap returns are volatile and the fund has experienced multi-year drawdowns. It is appropriate as a satellite allocation within a diversified portfolio rather than a core holding, given the inherent cyclicality of small caps. Investors should be prepared for sharp interim declines, such as the negative calendar year returns in 2018, 2019, 2025, and 2026 so far.
- Consistent positive alpha versus the NIFTY SmallCap 250 over 5Y (1.52%), 10Y (4.91%), 12Y (5.12%), and 15Y (4.35%) horizons, indicating sustained long-term outperformance
- Downside capture consistently below 100% (77-85%) with beta around 0.80-0.85, meaning the fund has historically cushioned losses better than the benchmark
- Well-diversified 83-stock portfolio with the top 10 holdings at only about 25% of NAV and no single sector above 11.8%
- Recent underperformance, with negative alpha of -8.17% over 1Y and 1Y SIP XIRR of 11.7% well below the category average of 17.78%
- Six drawdown events exceeding 10% and a maximum drawdown duration of 694 days, underscoring the prolonged recovery risk inherent in small cap investing
Generated on 17-10-2026, 4:54 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 | ₹12.87 L | 21.8% | -65.5% | 128.0% |
| 3 Years | ₹36.00 L | ₹50.16 L | 20.9% | -30.9% | 48.2% |
| 5 Years | ₹60.00 L | ₹1.02 Cr | 20.0% | -12.0% | 37.7% |
| 7 Years | ₹84.00 L | ₹1.83 Cr | 22.6% | 14.6% | 29.1% |
| 10 Years | ₹1.20 Cr | ₹3.62 Cr | 21.0% | 16.6% | 24.6% |
| 12 Years | ₹1.44 Cr | ₹4.58 Cr | 18.1% | 17.2% | 18.7% |
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 | 21.8% | 21.9% | 17.8% | -0.2% |
| 3 Years | 20.9% | 15.2% | 20.2% | +5.7% |
| 5 Years | 20.0% | 14.3% | 22.9% | +5.7% |
| 7 Years | 22.6% | 14.4% | 21.8% | +8.2% |
| 10 Years | 21.0% | 14.0% | 20.8% | +7.0% |
| 12 Years | 18.1% | 13.5% | 19.2% | +4.6% |
| Duration | Mean | Median | Min | Max | Sharpe | Sortino | % Positive | Cat. Mean | Cat. Median |
|---|---|---|---|---|---|---|---|---|---|
| 1 Year | 20.9% | 12.6% | -43.6% | 126.3% | 0.50 | 1.63 | 77% | — | — |
| 3 Years | 20.3% | 21.0% | -8.8% | 49.7% | 1.22 | 4.96 | 95% | — | — |
| 5 Years | 19.3% | 18.6% | 0.4% | 39.5% | 1.59 | 18.94 | 100% | — | — |
| 10 Years | 19.4% | 19.3% | 16.8% | 22.3% | 10.38 | — | 100% | — | — |
Calmar Ratio by Duration
Compared against NIFTY SMALLCAP 250
| Duration | Alpha | Beta | Upside Capture | Downside Capture | Fund CAGR | Bench CAGR |
|---|---|---|---|---|---|---|
| 1 Year | -7.66 | 0.83 | 78.0% | 84.7% | -4.0% | 3.0% |
| 3 Years | -1.96 | 0.80 | 79.0% | 79.6% | 9.2% | 12.3% |
| 5 Years | +1.62 | 0.83 | 83.3% | 81.0% | 12.7% | 12.0% |
| 7 Years | +1.81 | 0.85 | 84.7% | 82.1% | 21.1% | 21.5% |
| 10 Years | +4.97 | 0.82 | 83.1% | 77.9% | 17.1% | 13.3% |
| 12 Years | +5.14 | 0.81 | 82.5% | 77.1% | 17.4% | 13.6% |
| 15 Years | +4.37 | 0.81 | 82.4% | 76.5% | 14.1% | 10.6% |
| # | Stock | % of NAV |
|---|---|---|
| 1 | Firstsource Solutions Ltd. | 3.68% |
| 2 | Aster DM Quality Care Limited | 3.37% |
| 3 | Gabriel India Ltd. | 3.09% |
| 4 | eClerx Services Limited | 2.92% |
| 5 | Bank of Baroda | 2.65% |
| 6 | Krishna Institute Of Medical Sciences Limited | 2.04% |
| 7 | Apar Industries Limited | 1.92% |
| 8 | Indian Bank | 1.91% |
| 9 | PEARL GLOBAL INDUSTRIES LIMITED | 1.90% |
| 10 | Eris Lifesciences Ltd | 1.89% |