New Delhi, Oct. 9 -- Small-cap mutual funds have outperformed mid-cap funds in 2026 so far, with the small-cap category delivering average returns of 9.89%, while the mid-cap fund category has posted negative returns of 1.02% as of 8 October.

However, the performance gap narrows over longer investment horizons, with both categories delivering double-digit annualised returns over three- and five-year periods.

Over the 3-year period, mid-cap funds have delivered a CAGR of 13.89%, marginally higher than the 13.81% returned by small-cap funds. Over 5 years, small-cap funds have taken the lead, delivering returns of 13.99%, compared with 12.69% for mid-cap funds.

However, category averages mask significant differences in individual scheme p...