New Delhi, Oct. 22 -- As people receive bonuses or look to invest more around Diwali, two mutual fund categories are locked in a tug-of-war: large-cap and small-cap funds.

According to AMFI data, large-cap funds received inflows of around Rs.859 crore in September 2026 after witnessing outflows in July and August. Meanwhile, small-cap funds continued to lead in inflows and attracted around Rs.9,039 crore, accounting for 23.6% of total equity mutual fund inflows in September.

The year-to-date returns present a contrasting picture. Large-cap funds posted negative category average returns of -9.19%, while small-cap funds returned 6.87% as of 21 October 2026, according to Morningstar data.

However, valuations tell a different story. Under ...