Small-cap mutual funds have emerged as the strongest equity category in FY27 so far, outperforming mid-cap, flexi-cap and large-cap peers in the first four months of the financial year. Data for the period from April 1 to July 31 shows small-cap funds delivered an average return of 22.31%, making them the top-performing segment among major equity fund categories.
Mid-cap funds followed with average gains of 17.22%, while flexi-cap funds returned 14.06%. Large-cap funds trailed the group with 10.5% over the same period. The performance gap highlights how smaller companies have led the market rebound despite a challenging backdrop at the start of FY27.
The new financial year began amid pressure on Indian equities from global tariff concerns, geopolitical tensions and swings in crude oil prices. Even with that uncertainty, smaller-company funds appear to have attracted the strongest upside, suggesting investors were rewarded for taking higher risk in the early part of the year.
Among individual schemes, JM Small Cap led the performance chart with a return of more than 32%, according to the report. Its outperformance underlines the sharp rally seen in the small-cap space, which has so far set the pace for equity mutual fund returns in FY27.
