Nippon India Small Cap Fund Performance Report

Published: December 21, 2021 at 7:00 am

Last Updated on December 29, 2021

In this edition of “fund performance report”, we look at Nippon India Smallcap Fund. Launched in Sep 2010, the fund now has an AUM of 17,555 Crores.

Disclaimer: Fund performance reports present return and risk analysis of a fund with representative benchmarks and are not investment recommendations. It must be expressly understood that the data below reflect only past performance and is in no way an indication of future performance.  Our investment recommendations can be found here: Handpicked List of Mutual Funds Oct-Dec 2021 (PlumbLine)

The market allocation history of the fund is shown below.  Since July 2017, the fund has been style-pure, focusing on small cap stocks.

Market cap allocation history of Nippon India Small Cap Fund
Market cap allocation history of Nippon India Small Cap Fund

We will use three metrics to analyze performance consistency compared to the fund’s benchmark – Nifty Smallcap 250 TRI. We also use Nifty Midcap 150 TRI and Nifty Next 50 TRI for the comparison. Analysis such as this can be found for 350+ equity funds in our monthly mutual fund screener.


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1 Rolling return outperformance consistency: the fund returns are compared with category benchmark returns over every possible 3Y,4Y, 5Y period. Higher the outperformance consistency, the better. Suppose 876 fund returns were compared with 876 benchmark returns, and the fund has beaten the benchmark 675 times. The consistency score will be 675/876 ~ 77%.

Rolling Returns outperformance consistency over three years (1465 data points)

vs NiftyMidcap150TRIvs NiftyNext50TRIvs NiftySmallcap250TRI
86%88%100%

Rolling Returns outperformance consistency over four years (1220 data points)

vs NiftyMidcap150TRIvs NiftyNext50TRIvs NiftySmallcap250TRI
98%90%100%

Rolling Returns outperformance consistency over five years (971 data points)

vs NiftyMidcap150TRIvs NiftyNext50TRIvs NiftySmallcap250TRI
100%100%100%

That is indeed an excellent track record. Notice that Nifty Midcap 150 and Nifty Next 50 are tougher benchmarks to beat than the small cap index.

2 Upside performance consistency over every possible 3Y,4Y, 5Y: Higher the better. A score of 70% means, 7 out of 10 times, the fund performed better than the category benchmark when the benchmark was moving upThis is a measure of reward. It is computed from rolling upside capture data (see link below).

Three years

vs NiftyMidcap150TRIvs NiftyNext50TRIvs NiftySmallcap250TRI
76%51%82%

Four years

vs NiftyMidcap150TRIvs NiftyNext50TRIvs NiftySmallcap250TRI
92%63%88%

Five years

vs NiftyMidcap150TRIvs NiftyNext50TRIvs NiftySmallcap250TRI
88%58%98%

With respect to the mid cap and small cap indices, Nippon India Smallcap fund displays good upside performance. When these indices move up, the fund tends to move up more.

Most funds do not exhibit consistent upside capture > 100% (higher returns than the benchmark’s positive monthly return). See for example: Strange, but true! How mutual funds beat the index!

3 Downside performance consistency over every possible 3Y,4Y, 5Y. Higher, the better. A score of 60% means, 6 out of 10 times, the fund performed better than the category benchmark when the benchmark was moving down. This is a measure of risk protection. It is computed from rolling downside capture data. Read more: An introduction to Downside and Upside Capture Ratios.

Thee years

vs NiftyMidcap150TRIvs NiftyNext50TRIvs NiftySmallcap250TRI
68%75%88%

Four years

vs NiftyMidcap150TRIvs NiftyNext50TRIvs NiftySmallcap250TRI
82%97%90%

Five years

vs NiftyMidcap150TRIvs NiftyNext50TRIvs NiftySmallcap250TRI
69%92%88%

Thus Nippon India Small Cap Fund is one of those rare funds with excellent upside and downside capture consistency along with return outperformance consistency.

While we acknowledge good performance, we do not recommend investing in small cap mutual funds, particularly by SIP. See:

(1) Why a SIP in Small Cap Mutual Funds is a waste of money and time.

(2) Do not use SIPs for Small Cap Mutual Funds: Try this instead!

(3) Is it worth buying small cap mutual funds?

Check out other performance reports.

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