Small-Cap Mutual Funds Attract ₹9,038.57 Crore in September Despite Negative Monthly Returns
5paisa Capital Ltd
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Last Updated: 15th October 2026 - 01:30 pm
Key Takeaways
- Small-cap mutual funds recorded net inflows of ₹9,038.57 crore in September 2026, up 13.4% from August.
- Bandhan Small Cap Fund led selected schemes with estimated inflows of ₹2,191 crore, followed by Invesco India Smallcap Fund and Nippon India Small Cap Fund.
- All three schemes reported negative monthly returns despite attracting estimated net investments.
Small-Cap Funds Lead Equity Category Inflows
Small-cap mutual funds attracted ₹9,038.57 crore in net investments during September 2026, the highest among equity-oriented mutual fund categories, according to data released by the Association of Mutual Funds in India (AMFI).
The category received ₹7,973.33 crore in August, indicating an increase of approximately ₹1,065 crore, or 13.4%, in September.
Small-cap schemes accounted for nearly 23.6% of the ₹38,306.55 crore received by equity mutual funds during the month.
Mid-cap schemes followed with net inflows of ₹7,834.84 crore, while flexi-cap funds attracted ₹6,701.80 crore.
The inflows occurred during a month when broader equity indices declined. The Nifty Smallcap 250 fell 3.12% in September, while the Nifty 50 declined 6.06%.
Bandhan, Invesco and Nippon India Lead Scheme-Level Estimates
A scheme-level analysis using ACE MF data identified Bandhan Small Cap Fund, Invesco India Smallcap Fund and Nippon India Small Cap Fund as the leading recipients of estimated September inflows.
| Scheme | Estimated September Inflows | September Return |
|---|---|---|
| Bandhan Small Cap Fund | ₹2,191 crore | -1.50% |
| Invesco India Smallcap Fund | ₹982 crore | -3.78% |
| Nippon India Small Cap Fund | ₹750 crore | -2.94% |
These scheme-level inflows are estimates based on changes in month-end assets under management adjusted for investment returns. They should not be confused with AMFI's official category-level net flow figures.
Bandhan Small Cap Fund's assets increased from ₹34,176 crore in August to ₹35,856 crore in September.
Invesco India Smallcap Fund's assets rose from ₹15,744 crore to ₹16,131 crore.
Nippon India Small Cap Fund reported a different pattern. Its assets declined from ₹82,580 crore to ₹80,906 crore despite estimated positive inflows, reflecting the effect of negative investment returns on the portfolio's market value.
Portfolio Structures Differ Across the Three Schemes
The three funds also displayed different approaches to portfolio construction.
Bandhan Small Cap Fund held 261 stocks, with its ten largest holdings representing 17.36% of the portfolio. Cash and cash equivalents accounted for 12.98%.
Invesco India Smallcap Fund held 75 stocks. Its ten largest positions represented 34.19% of assets, indicating a more concentrated portfolio. Its cash allocation was 1.10%.
Nippon India Small Cap Fund held 256 stocks, while its ten largest holdings represented 14.52% of the portfolio.
These differences show that schemes classified within the same mutual fund category can have materially different levels of concentration, liquidity and exposure to individual companies.
What September's Numbers Indicate
September's data highlights a distinction between mutual fund flows and investment performance.
Positive net inflows indicate that subscriptions exceeded redemptions during the period. They do not necessarily indicate that the schemes generated positive investment returns.
Similarly, assets under management can decline despite fresh net investments when the market value of portfolio holdings falls.
The reported figures therefore provide two separate observations: small-cap mutual funds continued receiving net investments during September, while the three selected schemes experienced negative monthly returns.
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