Mumbai, Mar 23: Total assets under management (AUM) of mid-cap and small-cap mutual funds continued their robust growth, reflecting sustained investor interest. Mid-cap funds recorded a five-year CAGR of 32.41%, increasing from Rs. 1.13 lakh crore in February 2021 to Rs. 4.62 lakh crore in February 2026. Small-cap funds posted a five-year CAGR of 39.93%, growing from Rs. 67,764 crore in February 2021 to Rs. 3.64 lakh crore in February 2026.
Net inflows into mid-cap funds stood at Rs. 4,003 crore, while small-cap funds recorded inflows of Rs. 3,881 crore in February 2026, a strong recovery from net outflows observed in February 2021.
Top Performing Funds (5-Year CAGR):
- Mid-Cap: HDFC Mid Cap Fund – Growth, Motilal Oswal Midcap Fund – Reg, Edelweiss Mid Cap Fund – Growth
- Small-Cap: Quant Small Cap Fund – Growth, Nippon India Small Cap Fund – Reg, Bandhan Small Cap Fund – Reg
ICRA Analytics noted that ongoing geopolitical tensions and recent foreign fund outflows may influence the near-term performance of mid and small-cap funds. Investors are expected to adopt a cautious stance, navigating market volatility.
Retail Participation through SIPs:
Disciplined investing via Systematic Investment Plans (SIPs) continues to gain momentum. February 2026 witnessed SIP contributions of Rs. 29,845 crore, marking a growth of nearly 14.79% compared to February 2025 (Rs. 25,999 crore), highlighting increasing retail participation in mutual funds.
ICRA Analytics emphasizes that long-term investment horizons and disciplined SIP investing can help investors leverage the power of compounding, particularly in mid and small-cap funds.
