Small-cap mutual funds started 2026 with poor returns, but they quickly recovered and performed very well in the following months. Even with the early ups and downs, small-cap funds have recently performed better than both mid-cap and large-cap funds. Because of this strong growth, many new investors are putting their money into them. Among these small-cap mutual funds, the ITI Small Cap Fund has given strong returns recently. Here is a closer look at how this fund works.
ITI Small Cap Fund Direct Growth
- NAV, as of 24 Sep 2026: ₹38.48
- Fund size, AUM: ₹3,602.85 Crore
- Expense ratio: 0.86%
- Exit load: 0.50%, if redeemed within 3 months
- 1 Year return: 20.94%
- 3 Year return: 25.31%
- Minimum SIP amount: ₹500
- Minimum Lump-Sum amount: ₹5,000
About the Fund
ITI Small Cap Fund Direct Growth is an equity mutual fund scheme from ITI Mutual Fund, launched on 14 May 2018. As the name suggests, it’s a small cap fund, meaning it mainly invests in small-sized companies with strong growth potential. Its goal is capital appreciation by investing mainly in equity and equity-related securities of small cap companies. The fund is benchmarked against the NIFTY Smallcap 250 Total Return Index and carries a Very High risk rating, which is typical for this category of funds.
How ₹1,000 Monthly SIP Would Have Grown
If someone had been investing ₹1,000 every month into this fund, here’s how their investment would have performed,
- 6 months: ₹6,000 invested would have grown to ₹6,562 with 9.37%
- 1 year: ₹12,000 invested would have grown ₹13,903 with 15.86%
- 3 years: ₹36,000 invested would have grown ₹47,168 with 31.02%
- 5 years: ₹60,000 invested would have grown ₹1,06,195 with 76.99%
How a ₹50,000 Lumpsum Would Have Grown
For someone who invested ₹50,000 all at once as a lumpsum investment instead of an SIP, here’s the returns that person would have got,
- 6 months: ₹50,000 would have grown ₹58,217 with 16.43%
- 1 year: ₹50,000 would have grown ₹60,470 with 20.94%
- 3 years: ₹50,000 would have grown ₹98,385 with 98.77%
- 5 years: ₹50,000 would have grown ₹1,20,324 with 140.65%
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Where the Fund Is Investing
Here are the fund’s top 5 holdings as things currently stand,
- Ami Organics Ltd or Acutaas Chemicals with 3.48%
- Welspun Corp Ltd with 2.59%
- Laurus Labs Ltd with 2.41%
- Karur Vysya Bank Ltd with 2.10%
- VA Tech Wabag Ltd with 1.93%
This shows that the fund is spread across healthcare, materials, financials, and energy, which is required for small cap funds looking to balance growth potential with some diversification.
Who Manages This Fund
The fund is managed by two fund managers. Dhimant Shah has been managing this fund since August 2022. Alongside this fund, he also manages several other ITI Mutual Fund schemes, including the ITI Multi Cap Fund and ITI Flexi Cap Fund. Alok Ranjan joined as co-manager more recently, in May 2026. He also manages several other ITI schemes alongside this one.
Taxes and Exit Charges to Keep in Mind
If you redeem your investment within one year, the returns are taxed at 20%. If you hold on for more than a year, only the returns exceeding ₹1.25 lakh in a financial year get taxed, at 12.5%. There’s also an exit load of 0.50% if you redeem within 3 months of investing.
Should This Small Cap Mutual Fund Be On Your Radar?
ITI Small Cap Fund has clearly given strong returns, especially over the past year and 3 years. With this it is important to note that, small cap funds carry very high risk and tend to see sharp swings, so they’re generally better suited for investors with a long-term investment plan for who can stay invested through market ups and downs. As always, past performance doesn’t guarantee future returns, so it’s worth doing your own research or speaking with a financial advisor before deciding if this fits your portfolio. All data in this article has been sourced from the Groww app and is accurate as of 24 September 2026.