HSBC Small Cap Fund
Direct · GrowthAI Summary
HSBC Small Cap Fund has delivered strong long-term lump-sum returns, with a 10Y Fund CAGR of 17.92% versus the NIFTY SmallCap 250's 13.13%, generating alpha of 5.67% over 10Y and 6.34% over 12Y. However, its SIP XIRR lags the category average across most horizons — 15.05% vs 20.26% over 3Y and 20.24% vs 22.90% over 5Y — though it stays competitive at 12Y (19.13% vs 19.24%). The 1Y XIRR of 16.32% also trails the category's 17.77%, indicating recent underperformance against peers despite benchmark outperformance.
The fund shows a favorable asymmetry with downside capture consistently below upside capture — 87.29% downside vs 87.29% upside over 12Y, and 82.12% vs 87.72% over 10Y — meaning it loses less than the benchmark in falling markets. It has experienced 8 drawdown events exceeding 10%, with a maximum drawdown duration of 806 days and a 329-day recovery, underscoring the extended pain periods typical of small caps. Calmar ratios of roughly 0.37-0.42 across horizons reflect moderate risk-adjusted efficiency for the category.
The portfolio holds 97 stocks with a well-diversified top 10, where the largest position (GE Vernova T&D India) is only 2.18% of NAV, limiting single-stock risk. Sector allocation is spread across Industrial Products (13.1%), Capital Markets (8.5%), Pharmaceuticals (8.1%), Banks (6.8%), and Finance (6.6%), with meaningful weight in financials and electrical equipment. This breadth reduces concentration risk but also means returns depend more on broad small-cap trends than a few conviction bets.
The fund's SIP XIRR trails category averages at 1Y, 3Y, 5Y, 7Y, and 10Y — most notably 15.05% vs 20.26% over 3Y — suggesting it has underperformed many small-cap peers on SIP-based returns in recent years. Its long-term record remains solid, with the 12Y XIRR of 19.13% essentially matching the category's 19.24%, indicating the gap is a more recent phenomenon. Strong benchmark alpha over 7-15Y windows shows the fund has historically added value versus its index even if peers have done better recently.
This fund suits investors with a high risk tolerance and a horizon of at least 7-10 years, given the 806-day maximum drawdown duration and 8 drawdown events above 10% in its history. It is appropriate as a satellite allocation (typically 10-15% of an equity portfolio) for investors who can withstand extended periods of negative returns, such as the -11.43% in 2025 and -12.91% in 2018. Investors should prefer SIP investing given the volatility, though they should note the fund's recent SIP returns trail category peers.
- Consistent alpha versus the NIFTY SmallCap 250, with 10Y alpha of 5.67% and 12Y alpha of 6.34%
- Favorable capture asymmetry — downside capture of 81-92% versus upside capture of 87-100% across horizons, cushioning losses in market declines
- Highly diversified 97-stock portfolio with no single holding above 2.18% of NAV, minimizing stock-specific risk
- SIP XIRR trails the category average across nearly all horizons, including 15.05% vs 20.26% over 3Y, indicating recent peer underperformance
- Extended drawdown characteristics — a maximum drawdown lasting 806 days with a 329-day recovery and 8 drawdown events exceeding 10% — demand strong investor patience
Generated on 13-10-2026, 3:14 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 | ₹12.92 L | 23.3% | -65.8% | 121.1% |
| 3 Years | ₹36.00 L | ₹52.79 L | 21.6% | -33.4% | 53.8% |
| 5 Years | ₹60.00 L | ₹1.03 Cr | 20.2% | -13.3% | 40.7% |
| 7 Years | ₹84.00 L | ₹1.85 Cr | 23.1% | 14.6% | 31.1% |
| 10 Years | ₹1.20 Cr | ₹3.54 Cr | 21.5% | 15.9% | 25.9% |
| 12 Years | ₹1.44 Cr | ₹4.92 Cr | 19.1% | 16.7% | 20.0% |
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 | 23.3% | 21.9% | 17.8% | +1.4% |
| 3 Years | 21.6% | 15.2% | 20.2% | +6.4% |
| 5 Years | 20.2% | 14.3% | 22.9% | +6.0% |
| 7 Years | 23.1% | 14.4% | 21.8% | +8.7% |
| 10 Years | 21.5% | 14.0% | 20.8% | +7.4% |
| 12 Years | 19.1% | 13.5% | 19.2% | +5.6% |
| Duration | Mean | Median | Min | Max | Sharpe | Sortino | % Positive | Cat. Mean | Cat. Median |
|---|---|---|---|---|---|---|---|---|---|
| 1 Year | 22.1% | 14.3% | -42.6% | 123.0% | 0.50 | 1.61 | 74% | — | — |
| 3 Years | 21.0% | 22.2% | -11.6% | 51.2% | 1.14 | 3.81 | 90% | — | — |
| 5 Years | 19.7% | 18.8% | 0.5% | 41.4% | 1.57 | 22.23 | 100% | — | — |
| 10 Years | 20.2% | 19.7% | 17.3% | 23.6% | 8.74 | — | 100% | — | — |
Calmar Ratio by Duration
Compared against NIFTY SMALLCAP 250
| Duration | Alpha | Beta | Upside Capture | Downside Capture | Fund CAGR | Bench CAGR |
|---|---|---|---|---|---|---|
| 1 Year | +5.88 | 0.99 | 99.4% | 93.6% | 8.9% | 3.0% |
| 3 Years | +0.55 | 0.93 | 93.2% | 92.2% | 12.5% | 12.3% |
| 5 Years | +3.22 | 0.91 | 92.4% | 89.0% | 14.7% | 12.0% |
| 7 Years | +3.00 | 0.90 | 90.8% | 87.7% | 23.1% | 21.5% |
| 10 Years | +5.47 | 0.87 | 87.7% | 82.2% | 17.9% | 13.3% |
| 12 Years | +6.22 | 0.86 | 87.2% | 81.2% | 18.8% | 13.6% |
| 15 Years | +4.73 | 0.85 | 86.5% | 80.6% | 16.3% | 12.5% |
| # | Stock | % of NAV |
|---|---|---|
| 1 | GE Vernova T&D India Limited | 2.18% |
| 2 | BSE Ltd | 2.17% |
| 3 | PNB Housing Finance Limited | 2.08% |
| 4 | Karur Vysya Bank Limited | 1.99% |
| 5 | The Federal Bank Limited | 1.93% |
| 6 | APAR INDUSTRIES LTD | 1.92% |
| 7 | Sai Life Sciences Ltd. | 1.84% |
| 8 | Polycab India Limited | 1.65% |
| 9 | Neuland Laboratories Ltd | 1.64% |
| 10 | Radico Khaitan Limited | 1.64% |