Small-cap funds deliver by reverting to mean: Here're the 5 best performers

The category is volatile; take limited exposure to funds with quality portfolios

Small-cap funds have enjoyed a massive run-up over the past year. The category has turned in an average return of 109 per cent — the best-performing fund has yielded a humongous 201 per cent. Many investors, however, are concerned whether the category has turned risky after such a sharp rise.

View returns in perspective

Small-caps and mid-caps did not perform in 2018 and 2019. They were recovering in 2020, when the first lockdown began in March, triggering a correction. Small-caps fell again from an already low base. “The strong performance of small-cap funds has been driven by reversion to mean