The number
Over the three years to 30 September 2026, the median small-cap fund's worst fall from a peak was 24.16%. The shallowest fall among the 24 funds with a full three-year record was 19.43%. The deepest was 30.90%.
Almost all of it happened in one stretch. Twenty-three of the 24 funds peaked between September and December 2024, and 22 hit their low on the same day, 3 March 2025.
These are falls in each fund's NAV (Direct plan, Growth option), measured from the highest NAV to the lowest one after it, within the three years to 30 September 2026. The Nifty Smallcap 250's price index fell 26.14% over the same stretch, from 23 September 2024 to 3 March 2025.
The falls, next to the returns
| Fund (Direct, Growth) | Worst fall, 3 years | 3-year return, a year | Below its high now |
|---|---|---|---|
| Tata Small Cap | −30.90% | 11.97% | −9.51% |
| Sundaram Small Cap | −29.18% | 5.76% | −10.99% |
| HSBC Small Cap | −27.16% | 14.03% | −4.13% |
| Bank of India Small Cap | −27.08% | 21.75% | −0.60% |
| LIC MF Small Cap | −27.01% | 18.10% | −3.16% |
| … | |||
| ICICI Prudential Small Cap | −22.16% | 11.47% | −1.43% |
| PGIM India Small Cap | −21.47% | 15.84% | −3.37% |
| Axis Small Cap | −19.43% | 15.12% | −3.31% |
"Below its high now" is the 30 September 2026 NAV against the highest NAV of the three years.
Tata Small Cap is the odd one out. Its NAV fell 24.85% to 3 March 2025 like the others and recovered to within 5% of its peak. Then it fell again, further, to a low on 30 March 2026.
A deep fall did not mean a poor return
You might expect the funds that fell least to have done best overall. In this period they did not. Across the 24 funds, the correlation between the depth of the three-year fall and the three-year return was 0.10, close to none.
Bank of India Small Cap fell 27.08%, one of the deepest falls, and has the fourth-best three-year return, 21.75% a year. Axis Small Cap had the shallowest fall and a return of 15.12%, a little above the category median of 14.88%. Sundaram Small Cap fell 29.18% and returned 5.76%.
What the falls do show is the cost of the category. The median three-year fall for small-cap funds was 24.16%, against 21.23% for mid caps, 18.47% for flexi caps and 16.44% for large caps.
Where they are now
The recovery has been close to complete for most funds. On 30 September 2026:
- the median fund was 3.95% below its three-year high;
- 19 of the 24 had set a new high since 1 August 2026;
- 5 were more than 5% below their high, and two (Tata and Sundaram) more than 9% below.
The longer record is worse
The full NAV history of the older funds holds bigger falls than this one. For the 12 small-cap funds whose Direct plans date from 2013 or 2014, those records include the falls of 2018 and of March 2020. Across all 24 funds, the median worst fall over the full history was 38.76%. The deepest was Sundaram Small Cap's, 65.31%.
What this does not tell you
A drawdown is measured after the fact. Knowing the last fall was 24% says nothing about the size or timing of the next.
These are lump-sum numbers. Someone investing monthly through the fall bought units at the March 2025 low and saw a different result.
Survivors only, and no advice. Funds that closed are not here. Nothing in this post is a recommendation to buy or sell any fund.
Where to go from here
The small-cap fund page lists every fund, and the low-drawdown equity screen finds equity funds that never fell more than 20% yet returned over 12% a year for three years.
For the same category's returns rather than its falls, see the equity category scorecard. For how to sit through a fall like this one, read the psychology of a market crash, and for what investing monthly through falls does, a 20-year SIP through crashes.
For the valuation behind the fall and the rebound, see the Nifty Smallcap 250 P/E; for what these funds hold, how concentrated small-cap portfolios are.
Frequently asked questions
How much did small-cap funds fall in 2024–25?
Of the 24 small-cap funds (Direct plan, Growth option) with three years of NAVs to 30 September 2026, the median fell 24.16% from its peak at the worst point. The smallest fall was 19.43% and the largest 30.90%. For 22 of the 24, the low came on 3 March 2025.
Have small-cap funds recovered from the fall?
Largely. On 30 September 2026 the median small-cap fund sat 3.95% below its three-year high, and 19 of the 24 had set a new high since 1 August 2026. Two were still more than 9% below their peaks.
Did the funds that fell least earn the most?
Not in this period. The correlation between a fund's worst three-year fall and its three-year return was 0.10, close to none. The fund with the second-deepest fall returned 5.76% a year; the fund with the shallowest returned 15.12%.
This is commentary on published data, not investment advice. WealthTicker is not a SEBI-registered adviser or distributor. Figures are as of the dates stated and can be revised by their source.
Keep reading
Arbitrage funds vs liquid funds: the 2026 scorecard
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Balanced advantage funds in 2026's falling market
The Nifty 50 fell 13.4% from 31 December 2025 to 30 September 2026. The median balanced advantage fund lost 1.7%, and its worst dip was 8.7%.
Direct vs regular plans: the 1.16-point equity fee gap
A regular equity plan costs a median 1.16 points a year more than its direct twin, on AMFI's September 2026 data. Over ten years, direct ended 10.2% ahead.