HDFC Small Cap Fund Direct Growth Review 2026: NAV, Returns, Portfolio & Should You Invest?
- August 28, 2026
- Posted by: Harsh Piplani
- Category: Mutual Funds
HDFC Small Cap Fund Direct Growth Plan has a NAV of ₹160.777 as of 27 August 2026 and a scheme AUM of ₹41,679 Cr. Its 1-year, 3-year and 5-year returns are 0.46%, 12.09% and 16.53%, and the scheme sits in the High Risk bucket.
Our view is that this fund fits investors who can tolerate sharp swings and are willing to stay invested long enough for small-cap compounding to work through cycles. The portfolio is heavily tilted toward small caps, so the return path can differ meaningfully from the benchmark in shorter windows.
Quick facts
| Metric | Value |
|---|---|
| NAV | ₹160.777 as of 27 August 2026 |
| AUM | ₹41,679 Cr |
| Expense Ratio | 0.67% |
| Launch Date | 01 January 2013 |
| Min SIP | ₹100 |
| Risk Category | High Risk |
| Benchmark | Nifty Small Cap |
| Fund Category | Equity |
| Exit Load | 1% if units are sold within 1 year; nil after 1 year |
| Fund Managers | Chirag Setalvad |
The fund is managed by Chirag Setalvad.
Source data date: as of 27 Aug 2026
Performance
| Period | Fund return | Benchmark return |
|---|---|---|
| 1M | 1.04% | 3.90% |
| 3M | 5.83% | 8.48% |
| 1Y | 0.46% | 8.56% |
| 3Y | 12.09% | 14.23% |
| 5Y | 16.53% | 15.79% |
The recent picture is softer than the benchmark. Over 1 month, 3 months and 1 year, the fund has trailed the Nifty Small Cap benchmark, which tells us that the latest phase has been choppier for the scheme than for the index.
The longer view is more balanced. The 3-year return is still below the benchmark, but the gap is much narrower than in the 1-year period, while the 5-year return edges ahead of the benchmark. That pattern suggests the fund has been able to compound through a full market cycle, even though shorter windows have been uneven.
The path of returns also looks volatile rather than smooth. The one-year curve shows a clear drawdown before recovery, and the three- and five-year paths show several ups and downs instead of a straight climb. For investors, that matters because small-cap exposure can delay reward even when the long-term outcome is acceptable.
So, the fund does not look like a consistent short-term outperformer, but its five-year record shows that patient capital has still been rewarded better than the benchmark over the longer window. The current phase looks weaker than the medium-term pattern, which is important when judging entry timing.
Source data date: as of 27 Aug 2026
Should you BUY or HOLD HDFC Small Cap?
A fund’s past returns alone don’t tell you whether you should buy it today or continue holding it.
The right decision depends on factors such as your current allocation, purchase price, risk profile, investment horizon and the role this fund plays in your overall portfolio.
Already holding HDFC Small Cap? Thinking of investing now?
Peer comparison
| Fund | 1Y return | 3Y return | 5Y return |
|---|---|---|---|
| HDFC Small Cap Fund Direct Growth Plan | 0.46% | 12.09% | 16.53% |
| TRUSTMF Small Cap Fund Direct Growth Plan | 34.45% | Data not available | Data not available |
| Bank of India Small Cap Fund Direct Growth Plan | 29.86% | 23.69% | 21.61% |
| Motilal Oswal Small Cap Fund Direct Growth Plan | 27.40% | Data not available | Data not available |
| Union Small Cap Fund Direct Growth Plan | 26.56% | 19.25% | 19.15% |
| ITI Small Cap Fund Direct Growth Plan | 24.50% | 27.06% | 20.74% |
This assessment is prepared by Uniapps Investment Adviser Pvt. Ltd. under SEBI Registered Investment Adviser registration INA000017639.
Against the peer set, the fund’s 1-year return is well below the stronger recent numbers shown by several other schemes. That gap matters because the most recent period is where the fund looks least competitive.
The longer record is more mixed. Its 3-year return is lower than the available 3-year figures for Bank of India Small Cap Fund Direct Growth Plan, Union Small Cap Fund Direct Growth Plan and ITI Small Cap Fund Direct Growth Plan, but its 5-year return is ahead of Bank of India Small Cap Fund Direct Growth Plan and Union Small Cap Fund Direct Growth Plan. That creates a split picture: weaker in the recent period, but more resilient over a longer holding horizon.
For readers comparing consistency, the fund does not tell the same story across every window. The short-term comparison is clearly softer, while the five-year comparison is closer to the better long-term outcomes in this peer set.
Source data date: as of 27 Aug 2026
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Portfolio: where your money goes
The market-cap mix is strongly tilted toward small caps at 76.4%, with mid caps at 8.81%, large caps at 4.83% and other holdings at 9.96%. That makes the fund’s behaviour more dependent on the small-cap market than on large-cap stability.
| Sector | Weight | Top holdings |
|---|---|---|
| IT | 20.85% | ECLERX SERVICES LIMITED (15.34%), FIRSTSOURCE SOLUTIONS LTD. (2.75%) |
| BANK | 16.12% | CITY UNION BANK LTD. (8.07%), BANK OF BARODA (2.29%) |
| INFRASTRUCTURE | 10.52% | IRB INFRASTRUCTURE DEVELOPERS LIMITED (4.12%), HINDUSTAN CONSTRUCTION COMPANY LTD. (2.75%) |
| AUTOMOBILE & ANCILLARIES | 8.90% | GABRIEL INDIA LTD. (1.81%), TIMKEN INDIA LTD. (0.99%) |
| HEALTHCARE | 7.91% | ASTER DM HEALTHCARE LIMITED (2.47%), ERIS LIFESCIENCES LTD (1.65%) |
The IT sector is the largest allocation at 20.85%, and it is materially larger than the next sector, Bank at 16.12%. That gap is meaningful, but the more important point is that the top two sectors together already account for a large share of the portfolio, so sector behaviour can have a noticeable effect on returns.
Within IT, ECLERX SERVICES LIMITED alone carries a 15.34% weight, which gives that holding greater influence than most of the other names shown here. Bank exposure is more spread out, but CITY UNION BANK LTD. at 8.07% is still a prominent position. Infrastructure, automobile and healthcare add diversification, yet none of them are large enough to dominate the overall mix.
Overall, the small-cap-heavy structure means this portfolio is likely to react strongly to sentiment in the lower market-cap segment. Among the listed sectors, IT may have the greatest influence on portfolio behaviour because it is the largest allocation and also contains the single biggest holding weight in the table.
Source data date: as of 27 Aug 2026
Who should invest
This fund suits investors who are comfortable with High Risk and can accept uneven short-term returns in exchange for a chance at longer-horizon compounding. The 1-year result has been weak, while the 3-year and 5-year outcomes show that the fund can recover over time, especially when small-cap conditions improve.
It is better aligned with a long investment horizon than with a short holding period. Investors who want steadier benchmark-style movement may find the small-cap tilt and the recent performance swings harder to tolerate.
The main trade-off is simple: the portfolio offers meaningful small-cap exposure and a five-year return that has held up reasonably well, but that comes with noticeable volatility and periods when the fund can lag the benchmark and stronger peers.
Tax and exit load
| Holding period | Tax rate | Description |
|---|---|---|
| Units held less than 1 year | 20% | Short-term capital gains tax |
| Units held more than 1 year | 12.5% | Long-term capital gains tax |
Exit load: 1% if units are sold on or before 1 year; no exit load after 1 year.
Source data date: as of 27 Aug 2026
Frequently asked questions
What is the current NAV of HDFC Small Cap Fund Direct Growth Plan?
The current NAV is ₹160.777 as of 27 August 2026.
How has HDFC Small Cap Fund Direct Growth Plan performed over 1 year, 3 years and 5 years?
Its returns are 0.46% for 1 year, 12.09% for 3 years and 16.53% for 5 years.
How does the fund compare with the Nifty Small Cap benchmark?
It has lagged the benchmark over 1 month, 3 months, 1 year and 3 years, but it is ahead over 5 years.
What is the minimum SIP amount?
The minimum SIP amount is ₹100.
How risky is this fund?
It is classified as High Risk. The portfolio is also heavily tilted toward small caps, which adds to the volatility profile.
Who manages the fund?
The fund is managed by Chirag Setalvad.
Bottom line
This fund’s short-term performance is weaker than its longer-term pattern, which matters for investors reading beyond the latest year. It trails several peers on recent returns, yet its five-year figure is more respectable and sits ahead of some comparable funds on the available long-window data. The small-cap-heavy portfolio and the large IT allocation suggest a return path that can be uneven and sector-sensitive, so it fits best with investors who can stay patient through volatility.
Published on 28 August 2026 at 10:19 AM IST
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RIA disclosure
Mutual fund investments are subject to market risks. Read all scheme-related documents carefully before investing. This review is prepared by Uniapps Investment Adviser Pvt. Ltd. (earlier known as Uniapps Global Research Pvt. Ltd.) under SEBI Registered Investment Adviser registration INA000017639 for general informational purposes and is not personalized investment advice.
