Small-cap funds have established themselves as the clear leaders across all investment timeframes in 2026. According to latest data from Mint as of October 1, Bank of India Small Cap Fund leads with a 31.74% year-to-date return, significantly ahead of other schemes. The fund also ranks fifth on the 3-year return chart at 21.60% and first on the 5-year return chart at 20.04%. TrustMF Smallcap Fund follows with 25.11% YTD return, while Samco Small Cap Fund delivers 24.93% and Union Small Cap Fund achieves 20.69%. As reported by Mint, this dominance across multiple periods demonstrates small-cap funds' consistent performance across different market cycles and investment horizons.
Only three equity mutual fund categories have delivered more than 10% returns in 2026 so far, based on category-level data as of 30 September. International equity funds lead with a 21.21% return, followed by sectoral-pharma funds at 13.98% and small-cap funds at 13.5% (updated to 13.5% from 10.59%). In contrast, large-cap funds have lost 8.17%, while technology funds have fallen 20.27% during the same period. According to reports from Mint, the category-level numbers do not tell the whole story, as returns have varied significantly among individual funds within these categories.
The second category to cross the 10% mark is pharma, which returned 13.98% through 30 September. The top funds have done considerably better than the category average. Kotak Healthcare Fund delivered 29.10%, more than twice the category return. According to Mint data, HDFC Pharma and Healthcare Fund returned 22.93%, PGIM India Healthcare Fund delivered 22.46%, and WhiteOak Capital Pharma and Healthcare Fund returned 22.37%. Quant Healthcare Fund also achieved 21.50% during the same period.
Small-cap funds recorded a 13.5% category return through September, making them the third equity category to cross the double-digit mark. The difference between the category and its top performers is again substantial. Bank of India Small Cap Fund returned 30.21%, while Samco Small Cap Fund and TrustMF Small Cap Fund returned 25.45% and 25.26%, respectively. As reported by Mint, Union Small Cap Fund delivered 21.36% and ITI Small Cap Fund achieved 19.82% during the same period. Small-cap companies have delivered strong earnings growth over the last few quarters, which triggered a rally in the segment.
The broader equity picture explains why these three categories stand out. Multi-cap funds have returned 1.10% and mid-cap funds 0.56%, while flexi-cap funds have declined 2.78%. The performance data, as reported by Mint, underlines how differently equity mutual fund categories and individual schemes have performed this year. The impact of heavy FII selling, US tariff threats, geopolitical uncertainty, elevated crude oil prices, and rising bond yields has weighed on Indian equities, triggering a sharp correction since the beginning of the year. Even within the same category, the performance gap between the best and worst performing schemes was as wide as 30 percentage points in some cases. The subdued performance of largecap funds has widened the return gap with smallcap schemes, with average smallcap fund returns (14.6% CAGR) now more than double that of largecap funds (7.1%).
