Small cap funds were the best-performing equity mutual fund category between Diwali on October 20, 2025, and October 24, 2026, gaining an average 1.26%. Bank of India Small Cap Fund led the 31 funds in the category with a 15.51% return.
Key Takeaways
- TRUSTMF Small Cap Fund returned 14.70%, while Nippon India Small Cap Fund lost 1.55%.
- Contra funds posted the largest average loss among the categories examined, at 9.78%.
- The analysis covered regular growth options and excluded sectoral, thematic and equity-oriented hybrid funds.
Small cap funds showed varied returns
After Bank of India and TRUSTMF, DSP Small Cap Fund returned 9.25% and Motilal Oswal Small Cap Fund gained 8.64% over the same period.
Nippon India Small Cap Fund, the category’s largest by assets managed, returned negative 1.55%. The range illustrates that the category’s positive average did not extend to every fund.
| Item | Details |
|---|---|
| Small cap funds | Average return: 1.26% |
| Contra funds | Average return: -9.78% |
| Large cap funds | Average return: -9.34% |
| Flexi cap funds | Average return: -6.79% |
| Mid cap funds | Average return: -4.65% |
| Multi cap funds | Average return: -4.33% |
How other equity categories performed
The other nine equity fund categories examined recorded negative average returns. Contra and large cap funds had the steepest average losses, while multi cap and mid cap funds fell less.
Among individual funds, Taurus Large Cap Fund gained 0.56%, HSBC Midcap Fund rose 4.08% and Groww Multicap Fund gained 5.18%.
Outlook and scope
Shivam Pathak, founder of Asset Elixir, said the long-term outlook for small-cap funds remained positive but cautioned about valuations. Jasmeet Singh, executive director at Anand Rathi Wealth, also expressed a positive medium- to long-term view while noting that small caps can be more volatile and face sharper corrections.
The returns measure performance over the specified period, not future results. The analysis included equity and equity-oriented funds using regular growth options, but excluded sectoral, thematic and equity-oriented hybrid funds.
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