Small-cap funds were the worst-performing equity category in October. Which funds held up and which lagged behind?

Small-cap funds lead October declines

Small-cap mutual funds posted the sharpest fall among equity fund categories in October 2026, dropping 5.83% on average across 36 schemes. Every fund in the category ended the month in negative territory, though the extent of losses varied widely from one scheme to another.

Invesco India Small Cap Fund was the most resilient, limiting its decline to 2.98%. TRUSTMF Small Cap Fund and Samco Small Cap Fund followed with losses of 3.27% and 4.10%. Mahindra Manulife Small Cap Fund and ITI Small Cap Fund fell 4.59% and 4.66%, while Aditya Birla Sun Life Small Cap Fund and HDFC Small Cap Fund declined 4.84% and 4.90%.

At the other extreme, Tata Small Cap Fund was the worst performer, plunging 11.16% — nearly double the category average. Quantum Small Cap Fund fell 7.40% and ICICI Prudential Small Cap Fund 7.25%. The Wealth Company Small Cap Fund and Bank of India Small Cap Fund lost 7.08% and 7.05%. Other 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%).

How other categories fared

The pain was not confined to small caps, but no other equity category fell as hard. Mid-cap funds declined 3.52% and multi-cap funds 2.73%. Value-oriented funds lost 1.86%, flexi-cap funds 1.66% and large-and-mid-cap funds 1.58%. Focused funds recorded the smallest decline at 1.15%.

Large-cap funds were the only equity category in the comparison to end October in positive territory, gaining 0.62%. The gap indicates that investors exposed to smaller companies faced a far tougher month than those holding large-cap schemes.

Why it matters for businesses

For companies, sharp swings in small-cap fund returns can affect sentiment in the broader market, including the flow of institutional capital into smaller listed firms. For investors and advisers tracking mutual fund portfolios, the wide dispersion between the best and wor…