The Economic Times News

Smallcap mutual funds tagged worst performers of 2025. Will 2026 change the picture?

Smallcap mutual funds faced a tough 2025, with most delivering negative returns due to valuation excesses and foreign investor outflows. Experts suggest long-term investors stay put, rebalancing if allocations exceed targets. A rebound is statistically probable in 2026, driven by potential rate cuts and earnings recovery.