- The Big Picture: Inflows and AUM Growth
- Category Breakdown: Where is the Money Going?
- Deep Dive: The State of Small Cap Funds in 2025
- Expert View: Is This a Buying Opportunity?
- Conclusion
The data for November 2025 is now available, highlighting a resilient Indian mutual fund industry. Despite market volatility throughout the year, investor confidence remains robust.
This report breaks down the inflow numbers for November and takes a deep dive into the performance of Small Cap funds, which have had a challenging year.
The Big Picture: Inflows and AUM Growth
November 2025 saw a significant jump in investments into equity mutual funds.
- Net Equity Inflows: Rose by 21% to ₹29,894 crore, up from ₹24,671 crore in October.
- Total Assets Under Management (AUM): The industry’s total assets under management grew to ₹80.80 lakh crore, up from ₹79.87 lakh crore the previous month.
This steady stream of capital suggests that investors are continuing to participate in the market through Systematic Investment Plans (SIPs) and lump sum investments, regardless of short-term market movements.
Category Breakdown: Where is the Money Going?
All three major categories saw a healthy increase in inflows compared to October:
- Large Cap Funds: Saw a sharp recovery with inflows of ₹1,640 crore (up 68.7%).
- Mid Cap Funds: Received ₹4,487 crore (up 17.9%).
- Small Cap Funds: Recorded inflows of ₹4,407 crore (up 26.8%).
Deep Dive: The State of Small Cap Funds in 2025
While inflows into Small Cap funds increased by nearly 27% in November, the actual performance of these funds in 2025 tells a different story.
The Performance Report Card
On average, Small Cap mutual funds are down by nearly 5% in 2025 so far. Out of 29 funds analysed during this period:
- 27 Funds delivered negative returns.
- Only 2 Funds gave positive returns.
Top Gainers & Losers (2025 YTD)
- Best Performers: Quantum Small Cap Fund led with a positive return of 3.13%, followed by Sundaram Small Cap Fund at 0.44%. PGIM India Small Cap Fund remained relatively flat, losing only 0.12%.
- Worst Performers: LIC MF Small Cap Fund saw the steepest decline, losing 14.70%, followed by Tata Small Cap Fund, which fell by 12.93%.
New Entrants
Funds launched recently showed mixed results. The Mirae Asset Small Cap Fund, launched in January 2025, stood out with an absolute return of 15.55% since inception. Conversely, newer launches like Bajaj Finserv Small Cap (-5.43%) and Helios Small Cap (-1.50%) are currently in the negative.
Expert View: Is This a Buying Opportunity?
With Small Caps correcting, many investors are worried. However, historical data suggests this might be a standard market cycle.
The Historical Pattern (2005 Onwards)
According to research on the Small Cap 250 index:
- The Drop: When the index corrects, it typically falls about 24-25% from its peak.
- The Duration: The correction phase usually lasts 3 to 4 months.
- The Recovery: It generally takes 1 to 1.5 years for the index to recover.
What Should Investors Do?
Market experts suggest that the current correction offers an opportunity for investors with a long-term view. If you have an investment horizon of 3 to 5 years, increasing exposure to Small Caps now could be beneficial. The key is to stay focused on the long term and ensure your portfolio is correctly allocated.
Conclusion
November 2025 proved that Indian investors are maturing; they are buying the dip rather than panicking. While Small Cap funds have struggled to generate returns this year, the increased inflows suggest that investors are betting on a future recovery. As always, patience and a multi-year horizon remain the keys to navigating this segment.
Disclaimer: The content is meant for education and general information purposes only. Past performance is not indicative of future returns. Mutual Funds are non-exchange traded products, and INDstocks is merely acting as a mutual fund distributor. All disputes with respect to distribution activity, would not have access to the exchange investor redressal forum or arbitration mechanism. Mutual Fund investments are subject to market risks, read all scheme related documents carefully before investing. INDstocks Private Limited (formerly known as INDmoney Private Limited) 616, Level 6, Suncity Success Tower, Sector 65, Gurugram, 122005, SEBI Stock Broking Registration No: INZ000305337, Trading and Clearing Member of NSE (90267, M70042) and BSE, BSE StarMF (6779), AMFI Registration No: ARN-254564, SEBI Depository Participant Reg. No. IN-DP-690-2022, Depository Participant ID: CDSL 12095500, Research Analyst Registration No. INH000018948 BSE RA Enlistment No. 6428.