Archive · 25 Dec 2025
Indian Investors Show Long-Term Commitment Amid Market Volatility
Even though small-cap mutual funds in India have not done well this year, many regular investors are still putting money into them.
In November 2025, these funds got a lot more money than the month before, even though their overall value went down a bit.
Experts say this is because investors are thinking long-term and can handle some ups and downs.
They advise spreading investments across different types of funds and not making quick decisions based on short-term changes.
History shows that even if small-cap funds don't do well for a while, they can sometimes make big gains later.
Investors who kept putting money in during the bad times did better than those who waited.
Also, having a mix of different types of investments, like stocks, bonds, and gold, can help protect your money when some parts of the market are not doing well.
Experts also believe that every fall in the market is an opportunity to buy, and they remain bullish on themes like AI, semiconductors, and defence for 2026.
They advise investors to be cautious about overvalued stocks and to focus on companies with strong growth potential.
Small-cap mutual funds in India saw a 27% increase in inflows in November 2025, reaching ₹4,406 crore, up from ₹3,476 crore in October.
Despite this, the Nifty Smallcap 250 – TRI index corrected by 3.3% in November 2025, and small-cap funds have seen an average decline of nearly 5% in 2025.
Experts attribute the continued inflows to a disciplined long-term approach among retail investors, with a focus on systematic investment plans (SIPs) and diversified portfolios.
Investors with a higher risk appetite are comfortable riding out volatility, especially as market corrections ease valuation pressures.
Experts recommend a diversified portfolio across small-cap, mid-cap, large-cap, and hybrid funds to navigate volatility and potential market corrections.
- Who
- Retail investors and domestic institutional investors (DIIs) in India
- What
- Increased inflows into small-cap mutual funds and long-term investment strategies
- When
- November 2025 and ongoing trends
- Where
- India
- Why
- Long-term investment approach, potential for high returns, and structural shift in investment culture
- Inflows in November 2025 (Small-cap funds)
- ₹4,406 crore
- Inflows in October 2025 (Small-cap funds)
- ₹3,476 crore
- Nifty Smallcap 250 – TRI index correction in November 2025
- 3.3%
- Average decline of small-cap funds in 2025
- 5%
- Recommended investment strategy
- Systematic Investment Plans (SIPs) and diversified portfolio
- Large-cap index returns in 2025
- Mid-to-high single-digit
- Mid-cap index returns in 2025
- Low single-digit
- Small-cap index returns in 2025
- Negative territory (down 7-8%)
- Expected growth rate for good valuations
- 20% annually
- Key investment themes for 2026
- AI, semiconductors, defence, nuclear energy, space tech, commodities
Sources
Why small-cap mutual funds are seeing strong retail inflows despite underperformance in 2025
Retail investors continue to bet big on ETFs
2025: A reality check for equity investors — what worked, what failed, and how to invest in 2026
Offers for sale account for 63 per cent of IPO fund-raise in 2025
Smart Money Guide 2026: How To Earn Maximum Returns With Minimum Risk
Smallcap, midcap stocks struggle behind blue-chip peer Sensex this yr; outlook cautiously optimistic
Smallcap, midcap stocks struggle behind blue-chip peer Sensex this year; outlook cautiously optimistic