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You should choose small-cap mutual funds if you have surplus cash you can invest to build wealth over time. Small-cap companies offer greater capital gains, but they also carry greater risks.

These funds invest in companies up to Rs. 500 to Rs. 5000 crore in market capitalization.

Stock prices of smaller companies can be more volatile, meaning that a capital downfall can occur in the short term, but very high returns can be expected in the long run.