Nippon India Small Cap Fund
Direct · GrowthAI Summary
Nippon India Small Cap Fund has delivered strong SIP XIRR across all horizons, ranging from 20.43% (1Y) to 26.58% (5Y), consistently beating the category average at every period — for example, 24.41% vs 20.31% over 3Y and 24.68% vs 20.84% over 10Y. Against the NIFTY SMALLCAP 250 benchmark, the fund has generated positive alpha across all windows, from 2.32% (3Y) to 9.09% (15Y), with lump-sum CAGR of 20.22% vs 13.37% over 12Y. This long-term outperformance across both SIP and lump-sum metrics underscores durable stock-selection skill.
The fund's beta of roughly 0.85-0.89 across all periods indicates it moves less than the benchmark, and its downside capture of 82-85% versus upside capture of 85-91% shows a favorable asymmetry. However, small caps are inherently volatile — the fund has experienced 8 drawdown events exceeding 10%, and the maximum drawdown lasted 799 days with a 265-day recovery, highlighting the extended pain periods investors must endure. Calmar ratios of 0.47-0.63 across horizons reflect moderate risk-adjusted efficiency typical of the small-cap category.
The portfolio is highly diversified with 241 holdings, and the top 10 positions total only about 15.5% of NAV, with the largest holding (TD Power Systems) at just 1.88%. Sector exposure is spread across Electrical Equipment (9.2%), Auto Components (7.7%), Banks (7.6%), Industrial Products (6.7%), and Consumer Durables (5.4%), avoiding dangerous single-sector concentration. The tilt toward electrical equipment and capital-goods names reflects a cyclical/industrial orientation rather than a defensive one.
The fund outperforms the category average SIP XIRR at every measured horizon, with the widest gaps over longer periods — 24.68% vs 20.84% over 10Y and 23.29% vs 19.25% over 12Y. Calendar-year returns show typical small-cap dispersion, ranging from +97.57% (2014) to -15.73% (2018), but the long-run compounding has been superior to peers. This consistency across 1Y through 12Y windows suggests the outperformance is structural rather than a short-term anomaly.
This fund suits investors with high risk tolerance and a horizon of at least 7-10 years, given the 799-day maximum drawdown duration and history of negative calendar years like 2018 (-15.73%) and 2025 (-4.7%). It is best used as a satellite allocation within a diversified portfolio, ideally through SIPs to average out small-cap volatility. Investors who cannot tolerate drawdowns exceeding 10% occurring repeatedly over their holding period should consider mid-cap or large-cap alternatives instead.
- Consistent alpha over the NIFTY SMALLCAP 250 benchmark across all periods, peaking at 9.09% over 15Y
- SIP XIRR beats the category average at every horizon from 1Y to 12Y
- Favorable capture ratio asymmetry — downside capture of 82-85% versus upside capture of 85-91% — with a well-diversified 241-stock portfolio
- Extended drawdown risk: the maximum drawdown lasted 799 days with 8 separate drawdown events exceeding 10%, requiring exceptional patience
- Recent performance has softened, with negative returns in 2025 (-4.7%) and a modest 7.51% in 2026, and the 1Y XIRR of 20.43% is the weakest of all measured horizons
Generated on 10-10-2026, 3:03 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 | ₹13.20 L | 32.6% | -59.8% | 188.9% |
| 3 Years | ₹36.00 L | ₹53.46 L | 24.8% | -28.0% | 57.1% |
| 5 Years | ₹60.00 L | ₹1.13 Cr | 23.9% | -10.1% | 44.7% |
| 7 Years | ₹84.00 L | ₹2.00 Cr | 24.0% | 3.1% | 34.8% |
| 10 Years | ₹1.20 Cr | ₹4.34 Cr | 24.7% | 19.7% | 28.9% |
| 12 Years | ₹1.44 Cr | ₹6.51 Cr | 23.4% | 19.7% | 28.5% |
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 | 32.6% | 21.9% | 17.8% | +10.7% |
| 3 Years | 24.8% | 15.2% | 20.2% | +9.6% |
| 5 Years | 23.9% | 14.3% | 22.9% | +9.7% |
| 7 Years | 24.0% | 14.4% | 21.8% | +9.6% |
| 10 Years | 24.7% | 14.0% | 20.8% | +10.7% |
| 12 Years | 23.4% | 13.5% | 19.2% | +9.9% |
| Duration | Mean | Median | Min | Max | Sharpe | Sortino | % Positive | Cat. Mean | Cat. Median |
|---|---|---|---|---|---|---|---|---|---|
| 1 Year | 30.8% | 19.5% | -36.3% | 153.7% | 0.66 | 3.15 | 82% | — | — |
| 3 Years | 25.7% | 25.4% | -8.3% | 54.5% | 1.45 | 8.58 | 96% | — | — |
| 5 Years | 24.4% | 23.1% | 2.3% | 45.0% | 1.90 | 62.91 | 100% | — | — |
| 10 Years | 24.7% | 23.7% | 19.7% | 31.8% | 5.50 | — | 100% | — | — |
Calmar Ratio by Duration
Compared against NIFTY SMALLCAP 250
| Duration | Alpha | Beta | Upside Capture | Downside Capture | Fund CAGR | Bench CAGR |
|---|---|---|---|---|---|---|
| 1 Year | +2.62 | 0.87 | 86.2% | 82.9% | 4.8% | 1.6% |
| 3 Years | +2.32 | 0.85 | 85.1% | 82.3% | 13.3% | 11.7% |
| 5 Years | +5.22 | 0.86 | 88.5% | 83.2% | 16.6% | 12.2% |
| 7 Years | +6.71 | 0.89 | 90.7% | 84.8% | 25.8% | 20.7% |
| 10 Years | +7.59 | 0.88 | 90.9% | 83.9% | 19.9% | 13.0% |
| 12 Years | +7.54 | 0.88 | 91.1% | 84.3% | 20.2% | 13.4% |
| 15 Years | +9.07 | 0.87 | 90.7% | 81.9% | 21.3% | 13.1% |
| # | Stock | % of NAV |
|---|---|---|
| 1 | TD Power Systems Limited | 1.88% |
| 2 | Bharat Heavy Electricals Limited | 1.77% |
| 3 | HDFC Bank Limited | 1.75% |
| 4 | Apar Industries Limited | 1.74% |
| 5 | Acme Solar Holdings Ltd | 1.33% |
| 6 | Karur Vysya Bank Limited | 1.28% |
| 7 | Sai Life Sciences Limited | 1.24% |
| 8 | Sundram Fasteners Limited | 1.20% |
| 9 | State Bank of India | 1.19% |
| 10 | Elantas Beck India Limited | 1.16% |