Small-Cap Mutual Funds Lead Three-Year Returns in AMFI June 2026 Report

AMFI’s June report 2026 showed five small-cap mutual funds leading three-year returns in the regular plan. Bandhan Small Cap Fund topped the list at 27.10%. ITI Small Cap Fund followed with 23.59%. Invesco India Smallcap Fund, Mahindra Manulife Small Cap Fund, and Bank of India Small Cap Fund also crossed 21%.

These numbers came during a strong market phase for smaller listed firms. Small-cap mutual funds invest in relatively small companies with higher growth potential. That same potential can also bring sharper price swings. Investors often see higher gains in good periods, but they also face deeper falls in weak markets.

The five schemes also beat their stated benchmarks over the same three-year window. Bandhan Small Cap Fund tracked the BSE 250 Smallcap TRI. ITI Small Cap Fund and Bank of India Small Cap Fund used the Nifty Smallcap 250 TRI. The remaining two schemes also compared against the BSE 250 Smallcap TRI.

AMFI’s summary of the best-performing small-cap mutual funds listed the following results for the past three years.

Scheme Name	Benchmark	3‑Year Return (%)
Bandhan Small Cap Fund	BSE 250 Smallcap TRI	27.10
ITI Small Cap Fund	Nifty Smallcap 250 TRI	23.59
Invesco India Smallcap Fund	BSE 250 Smallcap TRI	22.43
Mahindra Manulife Small Cap Fund	BSE 250 Smallcap TRI	21.44
Bank of India Small Cap Fund	Nifty Smallcap 250 TRI	21.10

Bandhan Small Cap Fund beat its benchmark return of 17.71% for the period. ITI Small Cap Fund exceeded its benchmark return of 19.30%. Invesco India Smallcap Fund also beat 17.71%. Mahindra Manulife Small Cap Fund outpaced 17.71% as well. Bank of India Small Cap Fund stayed ahead of 19.30%.

Risk factors for small-cap mutual funds

Return potential came with higher uncertainty in this category. Small-cap mutual funds carried a "Very High" risk rating. Prices can move fast in either direction over short periods. Investors seeking stability may find these swings hard. Longer time frames of five to seven years can suit those with higher risk tolerance.

These five schemes showed strong three-year gains, based on AMFI’s June report 2026 data. Still, small-cap mutual funds can change course quickly with market moves. Investors typically align choices with goals, risk comfort, and time horizon. Past performance does not guarantee future returns, even when recent results look strong.