Midcap, smallcap mutual funds see AUM growth in 5 years, but near-term risks remain elevated: ICRA Analytics

With the total assets under management (AUM) of midcap funds and smallcap funds registering a five-year CAGR of 32.41% and 39.93% respectively, the ongoing geopolitical tensions and recent foreign fund outflow from Indian equity markets may impact the performance of midcap and smallcap funds in near term, according to a release by ICRA Analytics.

The release further said that the investors of midcap and smallcap mutual funds are expected to adopt a cautious stance amid the ongoing market volatility.

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The midcap funds had an AUM of Rs 4.62 lakh crore in February 2026, as against Rs 1.13 lakh crore in Feb 2021. The AUM of smallcap funds was recorded at Rs 3.64 lakh crore in Feb 2026, as compared with Rs 67,764 crore in Feb 2021.

	February 2021	February 2022	February 2023	February 2024	February 2025	February 2026
Mid Cap Net AUM	1,13,515	1,52,548	1,83,246	2,95,683	3,40,657	4,62,098
Small Cap Net AUM	67,764	1,00,407	1,31,568	2,49,071	2,73,877	3,63,537

Source: AMFI (In Rs crore)


The net inflows into midcap funds stood at Rs 4,003 crore while the same into smallcap stood at Rs 3,881 crore in February 2026, as against net outflows of Rs 99 crore and Rs 452 crore in Feb'21.

Scheme Name	NAV	1 Year	3 Years	5 Years
Quant Small Cap Fund - Growth	236.6283	-2.4433	18.0157	26.4039
Nippon India Small Cap Fund - Reg - Growth	162.1622	0.5231	20.2527	25.4792
Motilal Oswal Midcap Fund - Reg - Growth	89.0345	-4.2892	22.4641	25.1681
HDFC Mid Cap Fund - Growth	202.5750	12.7147	25.3273	24.5825
Bandhan Small Cap Fund - Reg - Growth	44.7550	4.0634	28.5912	23.9410
Edelweiss Mid Cap Fund - Growth	102.9050	10.6606	25.8578	23.3477
Nippon India Growth Mid Cap Fund - Reg - Growth	4,312.4386	10.0123	24.8364	23.3211
HDFC Small Cap Fund - Growth	133.8630	5.2877	19.1397	23.2657
Invesco India Smallcap Fund - Reg - Growth	41.0400	1.0311	22.2127	23.0659
Mahindra Manulife Mid Cap Fund - Reg - Growth	34.0847	7.5785	23.8944	22.6125

Source: MFI360Explorer, NAV date - February 27, 2026


The release further said that disciplined investing through SIPs (Systematic Investment Plan) and a long investment horizon can help investors benefit from compounding. Retail participation in the mutual fund industry through SIP channels witnessed sustained momentum.

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The overall SIP inflows in February 2026 witnessed a strong growth with contributions increasing by nearly 14.79 per cent at Rs 29,845 crore as compared with Rs 25,999 crore in February 2025.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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