The number
In a year when 30 of 33 large-cap funds lost money, 29 of 31 small-cap funds gained. The median small-cap fund returned 12.41% in the year to 1 October 2026. Only HDFC Small Cap (-2.94%) and Tata Small Cap (-0.28%) were in the red.
All figures are for the Direct plan, Growth option, computed from daily NAVs to 1 October 2026. Returns of a year or more are compounded annual rates. There are 36 small-cap funds; five launched too recently for a one-year number.
The spread, period by period
| 1 year | 3 years | 5 years | 10 years | |
|---|---|---|---|---|
| Funds counted | 31 | 24 | 21 | 12 |
| Worst | -2.94% | 9.68% | 12.03% | 13.34% |
| Lower quartile | 6.46% | 11.68% | 13.87% | 15.76% |
| Median | 12.41% | 14.64% | 15.43% | 17.13% |
| Upper quartile | 15.90% | 17.11% | 18.07% | 18.44% |
| Best | 29.25% | 23.17% | 20.05% | 20.77% |
Over one year the gap between the best and worst fund is 32 points, far wider than in large-cap (14 points), large & mid-cap (16) or multi-cap (21) funds. It narrows as the window lengthens, but even over five years it is 8 points a year.
Who led over one year, and over three
| Fund (Direct, Growth) | 1 year | 3 years | 5 years |
|---|---|---|---|
| Bank of India Small Cap | 29.25% | 21.62% | 20.05% |
| Union Small Cap | 20.55% | 16.46% | 16.81% |
| ITI Small Cap | 19.48% | 23.12% | 18.21% |
| DSP Small Cap | 17.30% | 16.93% | 17.30% |
| Bandhan Small Cap | 10.49% | 23.17% | 19.30% |
| Invesco India Small Cap | 14.04% | 21.56% | 19.25% |
| … | |||
| ICICI Prudential Small Cap | 4.10% | 11.06% | 13.68% |
| SBI Small Cap | 5.47% | 10.78% | 13.15% |
| HDFC Small Cap | -2.94% | 9.68% | 13.87% |
Two newer funds, TrustMF Small Cap (29.14%) and Motilal Oswal Small Cap (20.88%), also rank near the top over one year but have no three-year record yet.
The best three-year funds are Bandhan (23.17%) and ITI (23.12%), neither of which leads over one year. Bank of India is the only fund in the top three on both clocks.
The big, familiar funds
Nippon India Small Cap, usually the category's reference point, returned 7.90% over one year, 14.26% over three and 18.07% over five: below the median over the first two, above it over the third. Quant Small Cap returned 13.46%, 16.94% and 18.65%.
The price of those returns
Small-cap funds do fall hard. The median fund's worst peak-to-trough drop over the last three years was 24.14%, and the median volatility was 16.98%. The deepest drawdown was Tata Small Cap's 30.9%. The shallowest was Axis Small Cap at 19.4%, which still returned 14.71% a year over three years, just above the median.
For a closer look at the falls, see small-cap fund drawdowns in 2026. For how the same funds behaved earlier, see the July update.
Reading this
A 17-point gap between small-cap and large-cap medians (12.41% against -4.71%, see large-cap fund returns) over one year says more about the last twelve months than about the categories. Over three years the gap is 5.8 points (14.64% against 8.88%), and the small-cap funds took deeper falls to get there.
Use the SIP calculator to see what a monthly instalment would have produced at these rates, and the screener to filter by drawdown.
Returns are historical and computed from NAVs; they are not a forecast. Past returns do not indicate future performance.
Frequently asked questions
How have small-cap funds performed over the last year?
The median small-cap fund (Direct plan, Growth option) gained 12.41% in the year to 1 October 2026, across 31 funds with a full year of history. Only two were negative: HDFC Small Cap (-2.94%) and Tata Small Cap (-0.28%). The best gained 29.25%.
What is the five-year return of small-cap funds?
Across 21 funds the median five-year return was 15.43% a year, from 12.03% for the weakest to 20.05% for the best.
How big are small-cap fund falls?
The median small-cap fund's worst peak-to-trough fall over the last three years was 24.14%. The deepest was Tata Small Cap at 30.9%; the shallowest was Axis Small Cap at 19.4%.
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.
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