New Delhi, Sept. 22 -- Small-cap mutual funds are required to invest at least 65% of their assets in small-cap stocks. However, fund managers have flexibility over the remaining portion of the portfolio and can invest in large- and mid-cap companies based on their investment strategy.

As a result, small-cap funds can have significantly different exposure to larger companies. A comparison of the top 10 small-cap funds shows wide differences in their large- and mid-cap allocations, while their one-year returns also varied significantly.

Quant Small Cap Fund had the highest large-cap allocation among the 10 funds at 14.90%, followed by Nippon India Small Cap Fund at 14.59%. At the other end, DSP Small Cap Fund had no large-cap allocation, ...