Stock market slowdown drowns investors: 18 major mutual funds post negative returns, small‑cap stocks hit hardest

Mumbai (The Uttam Hindu): For the past year, the Indian stock market has been putting investors to a severe test. The situation is such that even the portfolios of seasoned investors who choose stocks with strong fundamentals are now in the red. Mutual funds, considered less risky than stocks, have also performed dismally. According to the latest data, at least 18 equity mutual fund schemes have wiped out investors' hard-earned money, delivering zero or negative returns over the past 12 months.

ACE Mutual Fund data as of October 31, 2025, reveals the harsh reality of the market. These 18 laggard funds, spanning categories such as small-cap, flexi-cap, ELSS, multi-cap, focused, and mid-cap, collectively manage a massive corpus of approximately ₹1.29 lakh crore. Worryingly, 12 of these 18 funds have directly caused losses to investors. Small-cap schemes have been the hardest hit in the equity segment this year, with seven large small-cap funds joining the dismal list of 'zero-return' funds.

Even leading fund houses were not spared from this decline. SBI Small Cap Fund, the largest in this category with an AUM of approximately ₹36,945 crore, has delivered a meager return of just 0.6% as of November 15, 2025. Kotak Small Cap Fund has declined by 2.70% and HSBC Small Cap Fund by 2.20%. Tata Small Cap Fund performed even worse, with investors suffering a massive loss of 6.25%. Franklin India Small Cap Fund also delivered a meager return of 0.94%.

The impact of this market slowdown isn't limited to small caps. Quant Multi-Cap Fund delivered a mere 0.14% return, while Quant Mid-Cap Fund (-0.15%), JM Flexi-Cap Fund (-0.83%), and New NJ Flexi-Cap Fund (-1.26%) slipped into the negative zone. Motilal Oswal Focused Fund and JM Value Fund also disappointed investors. These funds have AUMs between ₹1,000 crore and ₹10,000 crore, indicating that small- and mid-sized funds are under significant pressure.

Among the worst-performing funds, Samco Flexi Cap Fund tops the list, registering a massive decline of 11.32% over the past year. Looking at the data for 2025, Samco Flexi Cap Fund lost 15.49%, LIC MF Small Cap Fund lost 10.46%, and Samco ELSS Tax Saver Fund lost nearly 9%. These figures prove that despite strong fundamentals, investors have suffered significant losses in the current market volatility.