Both mutual fund and smallcase are better investment products compared to others. Mutual funds are less risky, your fund is managed by a fund manager who is an expert in that particular field, returns are higher compared to other products. When you invest in a mutual fund you are actually investing in diversification because your amount is invested in a well-diversified portfolio and well asset allocation without the need of creating an individual portfolio. You can start investing in direct mutual funds. Zerodha offers direct mutual funds through its platform coin which are absolutely free.
Whereas smallcase is the partner product of Zerodha where even if you don't have any knowledge about the stock market then you can start with smallcase which is a good way for beginners. There are 60 readymade themes available to invest and there are up to 20 stocks in each smallcase theme.
Both mutual fund and smallcase includes SIP and every investment includes a lot of risks because the future is unexpected. When we talk about MF they include a lot of diversification and the same as when we talk about smallcase it is a very good platform for beginners so it's up to you in which product you have to invest.