Small- and Mid-Cap Mutual Funds Attract ₹80,255 Crore in H1 FY27 as Large-Cap Inflows Lag

Key Takeaways

Small- and mid-cap mutual funds attracted combined inflows of ₹80,255 crore during the first half of FY27, according to Accord Fintech data reported by The Economic Times.

Small-cap funds received ₹42,212 crore, accounting for 22.6% of equity fund inflows, while mid-cap schemes attracted ₹38,043 crore, representing a 20% share.

The combined assets under management of small- and mid-cap funds increased nearly 24% year-on-year to ₹9.8 lakh crore as of September 2026.

Small- and Mid-Cap Funds Lead Equity Mutual Fund Inflows

Small- and mid-cap mutual funds accounted for a considerable portion of equity mutual fund inflows during the first half of the financial year 2026-27, as investors allocated substantially more money to these categories than to large-cap schemes.

According to data from Accord Fintech reported by The Economic Times on November 3, mid-cap mutual funds attracted ₹38,043 crore during April-September 2026. Small-cap schemes recorded higher inflows of ₹42,212 crore, bringing the combined figure to ₹80,255 crore.

Large-cap mutual funds, meanwhile, attracted ₹4,575 crore during the same period.

The difference reflects a marked variation in investment flows across market-capitalisation categories.

Small-Cap Funds Account for 22.6% of Equity Inflows

Small-cap mutual funds accounted for 22.6% of total equity mutual fund inflows during the first half of FY27, their highest share since the first half of FY24.

Mid-cap funds represented 20% of equity inflows, reaching their highest share in five years.

Large-cap funds contributed approximately 2% of overall equity inflows, according to the reported figures.

The allocations indicate that small- and mid-cap categories together accounted for more than two-fifths of equity fund inflows during the six-month period.

Market Performance Across Capitalisation Categories

Performance differences across market-capitalisation segments accompanied the variation in fund inflows.

During the first half of FY27, the BSE 250 SmallCap Index gained approximately 24%, while the BSE 150 MidCap Index advanced 13%.

The BSE 100 recorded a comparatively modest increase of 3.6%, and the Sensex rose approximately 0.7%.

These figures describe the performance of the underlying equity indices, rather than the returns generated by individual mutual fund schemes.

Fund performance can differ from benchmark movements because of portfolio composition, expenses and investment decisions.

Combined Small- and Mid-Cap Fund AUM Reaches ₹9.8 Lakh Crore

The combined net assets under management of small- and mid-cap funds rose nearly 24% year-on-year to approximately ₹9.8 lakh crore at the end of September 2026.

Their reported share of equity mutual fund assets increased to 26%, compared with 23.5% a year earlier.

Overall equity mutual fund AUM expanded nearly 12% to approximately ₹33.7 lakh crore.

The increase in category assets reflects a combination of investment flows and changes in the market value of underlying holdings.

The first-half figures highlight the scale of investor participation in smaller-company equity funds, although the data does not establish how future category returns will compare.