If you are looking to start investing in mutual funds, especially small-cap mutual funds, this is the place for you. Here's a list of the small-cap mutual fund plans we recommend for March 2021. The good news is, there are no changes to this list as of January. Small-cap mutual funds, which went through a difficult period from 2017 to 2019, saw a rebound in the fourth quarter of 2020. The rebound in the recovery saw some smaller funds achieve impressive returns. Currently, the small-cap fund category delivered an average return of 57.30% last year. The SEBI Guidelines require that small mutual fund schemes invest at least 65% of their group in very small companies. Sippy has defined small businesses as companies that are rated 250 on the stock market in terms of market capitalization. Given your investment world, small-cap mutual fund schemes can be extremely risky. Small-cap stocks suffer the most during a severe stock market recession or even the slightest bouts of volatility. That is why these charts are only recommended for investors who have the ability to take very high risk and tolerate volatility. Small-cap mutual fund schemes have the potential to provide high returns over a long period of time. This is because small-cap schemes are betting on small companies with very high growth potential. When a small business grows into a very large business, the shares of the business will be valued many times over. Simply put, small business stocks can be the many desirable factors that every investor dreams of owning. If you are a high-end investor and have a very long investment horizon, you can go for small-cap schemes to achieve your long-term financial goals. One word of caution: sharp dips or prolonged periods of volatility can test your patience, but stick with your regular investments to build wealth for an extended period. If you are a new investor and don't understand much about mutual fund investing, it's best to steer clear of small-cap mutual fund schemes. If you don't have a strong appetite for risk and are looking to grow your investment without risking too much, you should stick to large-cap and multi-cap schemes. Don't just fall for these charts for great short-term returns. This is a surefire way to lose money. Choose small-cap mutual fund schemes if you have a long-term investment horizon and a high appetite for risk. Keep your investment going or keep it long-term for big returns. Here are our handpicked mini wrap designs for you. Best Small Equity Mutual Funds to Invest in 2021 The Axis Small Capital Fund SBI small lid box Small cuttack box Nippon India Small Capital Fund Small Cap HDFC Fund