Looking to invest in MFs? ICICI Direct picks 5 small-cap mutual funds for 2023

HDFC Small Cap Fund: The fund has given 1-year absolute returns of 5.7 percent and 3-year absolute returns of 105 percent with assets under management (AUM) of ₹14,689 crore currently. Since inception, the fund has given absolute returns of 687 percent while annualised returns of 15 percent. It is a highly risky fund with a 3-star rating by Value Research and a 2-star rating by CRISIL. The fund has 94.51 percent investment in domestic equities of which 4.49 percent is in large-cap stocks, 5.51 percent is in mid-cap stocks, and 74.31 percent in small-cap stocks. This fund has maximum exposure to services, financials, and capital goods sectors. The top holdings of the fund are in Bank of Baroda, Sonata Software, Bajaj Electricals, Firesoure Solutions, and The Great Eastern Shipping.  

ICICI Prudential Smallcap Fund: This small-cap fund with AUM of ₹4,591 crore has given a 1-year absolute return of 9 percent. Meanwhile, its 3-year absolute and annualised returns stand at 119 percent and 30 percent, respectively. Since its inception, it has given an annual return of 17 percent and an absolute return of 377 percent. The fund has been rated 4 stars by Value Research and CRISIL. It has maximum exposure in the services, healthcare and capital goods sectors. The top holdings of the fund include Inox Leisure, Rolex Rings, CCL Products (India), Multi Commodity Exchange of India, and Cyient. The fund has 91.33 percent investment in domestic equities of which, 4.08 percent is in mid-cap stocks, and 62.21 percent in small-cap stocks.

Invesco Smallcap Fund: This small-cap fund with AUM of ₹1,418 crore has given 1-year absolute returns of 2 percent. Meanwhile, its 3-year absolute and annualised returns stand at 100 percent and 26 percent, respectively. Since its inception, it has given an annual return of 20 percent and an absolute return of 114 percent. It has been rated 2 stars by CRISIL and 3 stars by Value Research. The fund has 97.28 percent investment in domestic equities of which, 2.99 percent is in large-cap stocks, 9.34 percent is in mid-cap stocks, and 57.88 percent in small-cap stocks. It has maximum exposure in the capital goods and financial sectors followed by the material and automobile sectors. In terms of top holdings, Timken India, Craftsman Automation, Indian Bank, VIP and Rolex Rings are some stocks.  

Kotak Smallcap Fund: This small-cap fund with AUM of ₹8,498 crore has given 1-year absolute returns of -1 percent. Meanwhile, its 3-year absolute and annualised returns stand at 123 percent and 30 percent, respectively. Since its inception, it has given an annual return of 17 percent and an absolute return of 1,491 percent. Value Research rated the fund 4 stars and CRISIL rated it 3 stars. The fund has 96.68 percent investment in domestic equities of which 2.21 percent is in large-cap stocks, 15.94 percent is in mid-cap stocks, and 64.04 percent is in small-cap stocks. Its maximum exposure is in sectors including material, consumer discretionary, chemicals, and metals & mining. Its top holdings include Carborundum Universal, Century Plyboards (India), Ratnamani Metals & Tubes, Galaxy Surfactants, and Cyient.  

Nippon Small Cap Fund: This small cap fund with an AUM of ₹23,765 crore has given 1-year absolute returns of 9 percent. Meanwhile, its 3-year absolute and annualised returns stand at 139 percent and 33.5 percent, respectively. Since its inception, it has given an annual return of 20 percent and an absolute return of 820 percent. Both the agencies, Value Research & CRISIL rate the fund 4-star. The fund has 96.61% investment in domestic equities of which 7.98% is in Large Cap stocks, 7.68% is in Mid Cap stocks, and 64.65% is in Small Cap stocks. Sector-wise top holding of the fund includes Capital Goods, Financial, and Chemicals. Whereas, its top holdings include Tube Investments of India, HDFC Bank, Bank of Baroda, KPIT Technologies, and Tejas Network.