SBI Small Cap vs. Quant Small Cap: Which One to Choose?

Investing in SBI Small Cap vs. Quant Small Cap is like choosing between Dil Chahta Hai and Zindagi Na Milegi Dobara — both promise an exciting journey, but with very different flavors. SBI plays the steady, dependable friend who ensures balance and cushions the bumps with a higher cash buffer, while Quant is the adventurous one, going all-in with speed, bold moves, and algorithm-driven choices. In the end, both aim for the same destination - long-term wealth creation.

While both SBI and Quant Small Cap funds aim for long-term capital appreciation through Small-Cap equities, Quant has delivered higher multi-year returns but at the cost of greater recent volatility and slightly lower AUM, whereas SBI offers a marginally lower expense ratio, larger asset base, and steadier performance over shorter horizons.

Fund Overviews
 

SBI Small Cap Growth Fund (Direct Plan) manages ₹35,562.96 Cr in a well-diversified portfolio of small-cap stocks and cash. Quant Small Cap Growth Fund (Direct Plan) oversees ₹29,462.70 Cr, employing a structurally quantitative stock-selection model.

Performance Comparison
 

Despite similar mandates, the two schemes exhibit distinct return profiles:
 

Quant has outperformed SBI over the 3- and 5-year periods, driven by its systematic sector rotation and stock-ranking algorithms. SBI’s steadier 1-year performance reflects its higher cash buffer and more conservative sector bets.

Portfolio Composition and Strategy

SBI Small Cap Growth Fund maintains a cash cushion of 6.87% to manage volatility. Its sector exposures (as of 31 Jul 2025) include Financials (~17%), Industrials, Consumer Discretionary, and Healthcare, focusing on bottom-up stock selection by sector specialists.

By contrast, Quant Small Cap Growth Fund allocates only 1.89% to cash, favoring full equity deployment. Its top sector weights are Financials (17.88%), Healthcare (16.61%), Services (15.13%), and Energy (14.02%). Its rules-based strategy ranks stocks on growth metrics, quality, and valuation to optimize risk-adjusted returns.

Fund Managers

R. Srinivasan and Pradeep Kesavan jointly manage SBI Small Cap Growth Fund. Srinivasan, with an M.Com and MFM, brings over two decades of fundamental research and portfolio construction experience from Principal AMC and Oppenheimer & Co. Kesavan, a CFA charterholder, adds 20+ years of equity market expertise. Together, they maintain a ~6.9% cash buffer and diversified sector exposures to balance small-cap growth with volatility management.

Quant Small Cap Growth Fund is run by a seven-member team led by Sanjeev Sharma, alongside Sandeep Tandon, Ankit A Pande, Varun Pattani, Ayusha Kumbhat, Sameer Kate, and Yug Tibrewal. Their collaborative, rules-based approach uses quantitative screens for growth, quality, and valuation, enabling systematic stock ranking, and dynamic sector weighting.

Cost and Tax Considerations

Expense Ratio: SBI’s 0.74% ratio slightly exceeds Quant’s 0.71%, but SBI’s higher cash buffer can dampen volatility.

Exit Load: Both levy 1% if redeemed within one year.

Taxation: Short-term gains (<12 months) taxed at 15% + cess; long-term (>12 months) gains above ₹1 Lakh taxed at 10% + cess.

Risk Profile

Both funds are classified “Very High” on SEBI’s riskometer, reflecting the inherent volatility of small-cap equities. SBI’s strategy mitigates this via higher cash and diversified sector bets, whereas Quant embraces full equity exposure with algorithmic stock selection, resulting in sharper drawdowns during market corrections but superior upside capture in bull phases.

Ideal Investor Fit

SBI Small Cap Growth suits investors seeking a small-cap mandate with a moderate volatility buffer, modest SIP requirements (₹500), and a longer track record under active management.

Quant Small Cap Growth appeals to investors comfortable with algorithm-driven portfolios, willing to accept larger short-term swings for higher multi-year upside, and ready to invest at least ₹1,000 via SIP.

Conclusion

Both SBI and Quant Small Cap Growth funds offer compelling small-cap exposure. Choose SBI for steadier 1-year performance, lower SIP barrier, and higher liquidity cushion. Opt for Quant if you prioritize aggressive growth, can tolerate deeper drawdowns, and prefer a systematic, data-driven approach.

Disclaimer: Mutual fund investments are subject to market risks. Past performance is not indicative of future results. Please consult your financial advisor before investing.