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Investor interest in small-cap funds stays resilient despite 2025 volatility
Small-cap mutual funds saw strong inflows in 2025 as investors focused on long-term growth potential, supported by reasonable valuations despite short-term volatility and muted returns.
Small cap mutual funds have remained a preferred choice for investors in 2025, attracting cumulative net inflows of over ₹440 billion despite volatile market conditions. Although inflows moderated between August and October, November saw a renewed pickup as valuations eased closer to long-term averages. The Nifty Smallcap 250 index trades near its five year average PE, encouraging investors to continue allocations via SIPs or staggered lump-sum investments.