Small-cap funds were the worst-performing equity category in October. Which funds held up and which lagged behind?
Small-cap mutual funds emerged as the worst-performing equity category in October 2026, declining 5.83% on average. Among the 36 small-cap schemes, Invesco India Small Cap Fund was the most resilient, declining 2.98% in October.
TRUSTMF Small Cap Fund and Samco Small Cap Fund followed with losses of 3.27% and 4.10%, respectively. At the other end, Tata Small Cap Fund plunged 11.16%, making it the worst performer in the category.
The divergence highlights how differently fund portfolios navigated the difficult month. While the category average fell 5.83%, several schemes managed to outperform it by limiting their declines. However, even the better-performing funds remained in negative territory.
Which small-cap funds managed to limit losses?
Invesco India Small Cap Fund recorded the smallest decline among the schemes analysed, falling 2.98%. This was followed by TRUSTMF Small Cap Fund, which lost 3.27%, and Samco Small Cap Fund, which declined 4.10%.
Mahindra Manulife Small Cap Fund and ITI Small Cap Fund also performed relatively better, with losses of 4.59% and 4.66%, respectively. Aditya Birla Sun Life Small Cap Fund and HDFC Small Cap Fund posted declines of 4.84% and 4.90%.
|
Scheme |
October 2026 return |
| Invesco India Small Cap Fund | -2.98% |
| TRUSTMF Small Cap Fund | -3.27% |
| Samco Small Cap Fund | -4.10% |
| Mahindra Manulife Small Cap Fund | -4.59% |
| ITI Small Cap Fund | -4.66% |
| Source: Value Research. Returns are for direct plans. | |
Tata Small Cap Fund falls over 11%; these schemes lag behind
Tata Small Cap Fund was the worst-performing scheme in the category, declining 11.16% during October. Its loss was almost twice the category average.
Quantum Small Cap Fund was the second-worst performer, falling 7.40%, followed by ICICI Prudential Small Cap Fund, which declined 7.25%. The Wealth Company Small Cap Fund and Bank of India Small Cap Fund also recorded steep losses of 7.08% and 7.05%, respectively.
Other notable laggards included HSBC Small Cap Fund (-6.97%), Franklin India Small Cap Fund (-6.78%), DSP Small Cap Fund (-6.75%), Sundaram Small Cap Fund (-6.68%) and Groww Small Cap Fund (-6.67%).
|
Scheme |
October 2026 return |
| Tata Small Cap Fund | -11.16% |
| Quantum Small Cap Fund | -7.40% |
| ICICI Prudential Small Cap Fund | -7.25% |
| The Wealth Company Small Cap Fund | -7.08% |
| Bank of India Small Cap Fund | -7.05% |
| Source: Value Research. Returns are for direct plans. | |
Small-cap funds fare worse than other equity categories
The weakness was not limited to small-cap funds, but the category recorded the steepest decline among the equity mutual fund categories tracked.
Mid-cap funds fell 3.52% in October, while multi-cap funds declined 2.73%. Value-oriented funds lost 1.86%, followed by flexi-cap funds at 1.66% and large-and-mid-cap funds at 1.58%. Focused funds posted a relatively smaller decline of 1.15%.
Large-cap funds were the only equity category in the comparison to deliver positive returns, gaining 0.62% during the month.
|
Equity mutual fund category |
October 2026 return |
| Large Cap | 0.62% |
| Focused | -1.15% |
| Large & Mid Cap | -1.58% |
| Flexi Cap | -1.66% |
| Value Oriented | -1.86% |
| Multi Cap | -2.73% |
| Mid Cap | -3.52% |
| Small Cap | -5.83% |
| Source: Value Research | |
The performance gap suggests that investors in smaller-company stocks faced a considerably tougher month than those invested in large-cap funds.
However, one month’s returns should not be the sole basis for choosing or exiting a mutual fund. Investors should also assess longer-term performance, portfolio concentration, investment strategy and consistency across market cycles.
