Quant Small Cap vs Nippon India Small Cap: See Which Fund Hit 33.34% in Just 5 Years

Synopsis – This article highlights how Quant Small Cap and Nippon India Small Cap funds have performed in past 5 years. Which fund should choose will depend on their risk tolerance and investment duration.

The Small-Cap Funds offer an opportunity for investors to gain long-term value. However, with these opportunities come risks. Understanding the similarities and differences between the Quant Small Cap Fund and Nippon India Small Cap Fund will help investors determine their risk level and therefore which option better aligns with their investment philosophy. 

Fund Overview

Quant Small Cap Fund

• Very aggressive, with high conviction, and with more thematic exposure.
• Investment in only a few sectors (financials, energy, healthcare) and a limited number of companies within these sectors.
• Appeals to investors who have the ability to handle volatility and who desire tactical alpha.

Nippon India Small Cap Fund

• More diversified than the Quant Fund, through a bottom-up stock-building approach.
• Investment across a multiple of sectors (Capital Goods, Financials, Consumer, IT, etc).
• Focus on generating long-term consistency of compounding returns and spreading risk. Better suited for investors who are focused on stability.

Performance Snapshot (as of Nov 2025) 

Also read: HDFC Flexi Cap vs Parag Parikh Flexi Cap: Which Fund Delivered 20.4% Returns in 3 Years?

Holdings and Portfolio Construction

Quant Small Cap Fund 

• Holdings: Approximately 90-100 securities and concentrated.
• Large companies dominate the top holdings (Reliance Industries Jio Financial Services greater than 16%).
• Other larger holdings are Aegis Logistics, ABFRL, Bikaji Foods.
• Most sectors: Financial Services, Energy, Consumer Cyclical.
• Style: Targeted active management with higher tracking error and greater proportion of cyclical/thematic.

Nippon India Small Cap Fund 

• Investments : 200+ stocks, more diversified, but highly diversified across the small-cap asset class.
• Top holdings: HDFC Bank, MCX, Kirloskar Brothers, Dixon Technologies, Karur Vysya Bank.
• Most sectors: Capital goods, Financial Services, Consumer Cyclical; Heavy concentration of companies engaged in manufacturing IT.
• Style: Focused on core small-cap exposure with lower individual security risk.

Risk & Volatility

• Quant Small Cap 
  • Standard deviation: Approximately 18.8% (higher volatility).
  • Beta: Sharpe 1.04; outperforming benchmark’s as measured by Alpha, but experiencing higher volatilities.
• Nippon India Small Cap 
  • Standard deviation: Approximately 17.2% (slightly lower volatility than Quant Small Cap fund). 
  • Beta: Sharpe 1.01; outperformed the benchmark’s as measured by the higher Sharpe ratio; smaller fluctuations compared to the benchmark over many periods.

Expense Ratio and Exit Load

Investor Suitability

Quant Small Cap Fund

• This fund is suitable for aggressive investors looking for a higher alpha (return) over 3-5 years. An individual investor who can withstand extreme fluctuations (drawdowns) and a more aggressive portfolio management style will also find this fund to be suitable.
• Minimum Time Horizon is 7-10 years.

Nippon India Small Cap Fund

• This fund is suitable for long-term investors who wish to maintain a diversified investment across various types of small-cap stocks. It is also suitable for new and conservative investors, to an extent because they accept the higher risk compared to other asset classes while maintaining a diversified portfolio.
• Minimum Time Horizon of 7-10+ years; investment in SIPs can be made with a minimum investment of ₹100.

Summary Table

Expert Commentary

• Both funds have substantially outperformed small-cap benchmark indices for most of the time period due to their superior stock selection abilities and allocation to the best performing sectors.
• Investors typically consider Quant Small Cap Fund as an aggressive high conviction play, with the expectation of outperforming in bull market phases while suffering larger drawdowns in market corrections.
• Nippon India Small Cap Fund is typically recommended as the “core” allocation for small caps in a diversified portfolio, as this fund offers an extremely liquid and larger sized fund as compared to others, and has produced superior outcomes since inception.

Takeaway from this article

• Pick Quant Small Cap Fund if you are a high-risk and volatility tolerant investor looking for superior medium-term returns.
• Pick Nippon India Small Cap Fund if you want the benefits of long-term compounding with diversified risk, lower minimum SIP, a longer track record, and a better track record.
• Both of these funds are considered high-risk, small-cap funds. As such, investors should limit the allocation of any of these funds as part of their equity portfolio to approximately 10%-20%, with holdings remaining in place for at least seven to ten years.

Conclusion

An aggressive and alpha-seeking investor might gravitate toward Quant Small Cap Fund, while a long-term and directionally-oriented investor may prefer Nippon India Small Cap Fund. For all investors, consistent disciplined SIPs and a long-term commitment to investing are essential to reap the benefits of small-cap growth.

Written By Rachna Rajput