Purpose: This study analyses the performance of selected Indian small-cap mutual funds (SCMFs) and check whether they earn higher returns in comparison to their benchmark index (NIFTY Smallcap 250). While small-cap mutual funds have gained significant prominence within the Indian equity market, there are limited studies that have specifically focused on their performance and behaviour during major market events. This reveals an existing gap in the literature which this study addresses by analysing the risk-return performance of small-cap mutual funds, along with examining the impact of major events such as the COVID-19 pandemic, SEBI re-categorization rule and US tariff implementation over the past decade. Data and Methodology: The study used daily NAV data of select small-cap funds in India as well as the data of benchmark index (Nifty Smallcap 250). Weekly data was obtained by calculating the average of daily data and logarithmic returns were calculated for the period January 2015 to December 2025. An independent t-test was conducted to compare fund returns with the benchmark. A multiple regression model was used to assess the performance and examine the effect of major market shocks/events such as Covid-19, SEBI re-categorization rule and US tariff announcements. Further, risk-adjusted performance was evaluated using Sharpe and Treynor ratios to measure returns per unit of total and systematic risk, providing a better understanding of the funds’ true efficiency during the study period. Findings: The independent t-test results revealed that select small-cap funds performed in line with their benchmark index. According to multiple regression analysis, only Nippon India small-cap fund showed a significant positive alpha, while all funds had beta values less than one, indicating lower systematic risk. Risk-adjusted measures revealed that most funds outperformed the benchmark with Axis, Quant, and Nippon showing relatively better efficiency. The impact of major events/shocks was found to be limited and fund-specific, with selective positive effects during the Covid-19 period and SEBI re-categorization rule. Overall, the findings suggest that small-cap funds offer better efficiency despite market-aligned returns, providing important insights for investors’ decision-making.