Midcap, Smallcap Funds See Record Inflows in 2025 Despite Muted Returns

• Mid-cap and small-cap mutual funds recorded all-time high inflows in 2025, defying market volatility and muted returns.
• Mid-cap funds attracted Rs 49,939 crore (46% rise from 2024), while small-cap schemes saw Rs 52,321 crore (53% rise).
• BSE MidCap index gained only 1.1%, and BSE SmallCap index declined 6.6% in 2025, contrasting with Sensex and Nifty's 9-10.5% gains.
• Steady SIP inflows and sustained investor accumulation, driven by long-term outperformance, supported these fund flows.
• Domestic investors showed a clear preference for mid-cap and small-cap funds, while foreign investors largely avoided these segments.

Why It Matters: Record inflows into mid-cap and small-cap funds in 2025 highlight strong domestic investor conviction despite poor returns.