Last Updated on January 8, 2023 at 1:22 pm
This is a list of the worst-performing equity mutual funds over every possible five, four, and three periods between 1st Jan 2013 (introduction date of direct plans) to Jan 5th 2023.
Some caveats before we begin: (1) The definition of a “worst mutual fund” is as arbitrary as the definition of a “best mutual fund”. We hope that it is a reasonable definition, considering the high fees demanded by the MF industry. This is one of the highest in the world, according to a Morningstar study. (2) We choose a representative category benchmark and compare the fund’s returns with the benchmark over the above-mentioned periods. The choice of the benchmark is also arbitrary but reasonably representative. (3) SEBI mutual fund categorization rules were fully in place by May-June 2018. Some funds (particularly those from smaller AMCs) may have changed significantly changed in style after that. An exhaustive filtration taking these changes into account is beyond the capabilities of this study.
(4) A fund labelled as “worst” means a careful, deeper investigation of its past performance is necessary, particularly if you invest in it or consider future investments in it. (5) Sectoral funds/ thematic funds are compared with Nifty 100 TRI. As a data analyst, this choice is incorrect. However, as an investor, it makes sense, and that is more important! We are not trying to submit a thesis here! If a thematic fund fails against a large cap index, it is an avoidable fund for most investors.
How a worst mutual fund is defined
Say there are 800 five-year return periods possible; 1025 four-year return periods; 1300 three-year return periods. We shall define a fund as “worst” if it has beaten the benchmark for less than 50% of the 5Y and 4Y and 3Y return periods.
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Let us take, for example, Sundaram Focused Fund (Formerly Known as Principal Focused Multicap Fund)- Direct Plan – Growth Option. We compare it with Nifty Largemidcap 250 TRI.
- No of rolling return entries (3 Years) 1469
- No of times the fund has outperformed the index (3 years) 517
- rolling return outperformance Consistency Score (3 years) 35%
- No of rolling return entries (4 Years) 1224
- No of times the fund has outperformed the index (4 years) 534
- rolling return outperformance Consistency Score (4 years) 41%
- No of rolling return entries (5 Years) 976
- No of times the fund has outperformed the index (5 years) 226
- rolling return outperformance Consistency Score (5 years) 23%
Using our monthly Equity Mutual Fund Screener, we filer out all funds with a rolling return outperformance consistency of less than 50% over five years and four years and three years. This will be our definition of a “worst fund”. We make no claim of superiority over this definition. We just feel this is reasonable while appreciating that not all readers will agree with the methodology used.
NOTE: Investors holding these funds need not exit them in a hurry. Please use this as a sign to dig deeper and re-evaluate these funds. A fund absent from this list does not mean it is a “good fund” or an outperformer!
The filtration process
A total of 391 equity mutual funds were studied from these categories and against these benchmarks.
| Category | Benchmark |
| Aggressive Hybrid Fund | Crisil6535 |
| Dividend Yield Fund | Nifty 100 TRI |
| ELSS | N200TRI |
| Focussed Fund | Nifty Largemidcap 250 TRI |
| Large & Mid Cap Fund | Nifty Largemidcap 250 TRI |
| Large Cap Fund | Nifty 100 TRI |
| Mid Cap Fund | NiftyMidcap150TRI |
| Multi Cap Fund | Nifty500 Multicap 50:25:25 TRI |
| Flexi Cap Fund | Nifty Largemidcap 250 TRI |
| Sectoral/ Thematic | Nifty 100 TRI |
| Sectoral/ Thematic (international) | Nifty 100 TRI |
| Small Cap Fund | NiftyMidcap150TRI |
| Value Fund | Nifty 100 TRI |
We are left with 132 funds after applying the above filter.
Aggressive Hybrid Funds
| JM Equity Hybrid Fund (Direct) – Growth Option |
| Franklin India Equity Hybrid Fund – Direct – Growth |
| Tata Hybrid Equity Fund -Direct Plan- Growth Option |
| UTI – Hybrid Equity Fund -Direct Plan – Growth |
| Aditya Birla Sun Life Equity Hybrid’95 Fund – Direct Plan-Growth |
| Nippon India Equity Hybrid Fund- Direct Plan Growth Plan |
| LIC MF Equity Hybrid Fund-Direct Plan-Growth |
| L&T Hybrid Equity Fund – Direct Plan-Growth |
| Baroda BNP Paribas Aggressive Hybrid Fund- DIRECT PLAN – GROWTH OPTION |
| Shriram Hybrid Equity Fund- Direct Growth |
| PGIM India Hybrid Equity Fund – Direct Plan – Growth |
| IDBI Hybrid Equity Fund Growth Direct |
| IDFC Hybrid Equity Fund-Direct Plan Growth |
Dividend Yield Funds
| UTI-Dividend Yield Fund.-Growth-Direct |
| Aditya Birla Sun Life Dividend Yield Fund – Growth – Direct Plan |
| ICICI Prudential Dividend Yield Equity Fund Direct Plan Growth Option |
ELSS Funds
| Franklin India TAXSHIELD – Direct – Growth |
| HDFC Taxsaver – Growth Option – Direct Plan |
| HSBC Tax Saver Equity Fund – Growth Direct |
| Nippon India Tax Saver Fund – Direct Plan Growth Plan – Growth Option |
| SBI LONG TERM EQUITY FUND – DIRECT PLAN -GROWTH |
| LIC MF Tax Plan-Direct Plan-Growth |
| Edelweiss Long Term Equity Fund (Tax Savings) – Direct Plan-Growth Option |
| L&TTax Advantage Fund-Direct Plan-Growth |
| IDBI Equity Advantage Fund – Growth Direct |
| Shriram Long Term Equity Fund – Direct Growth |
| Sundaram Tax Savings Fund(G)-Direct Plan |
| UTI – Long Term Equity Fund (Tax Saving) – Direct Plan – Growth Option |
| Principal Personal Tax Saver Fund – Direct Plan |
| Tata India Tax Savings Fund-Growth-Direct Plan |
| Union Long Term Equity Fund – Direct Plan – Growth Option |
| Navi ELSS Tax Saver Fund- Direct Plan- Growth Option |
| Mahindra Manulife ELSS Kar Bachat Yojana – Direct Plan -Growth |
| Indiabulls Tax Savings Fund- Direct Plan- Growth Option |
Focussed Funds
| Franklin India Focused Equity Fund – Direct – Growth |
| HDFC Focused 30 Fund – Growth Option – Direct Plan |
| DSP Focus Fund – Direct Plan – Growth |
| IDFC Focused Equity Fund-Direct Plan-Growth |
| Aditya Birla Sun Life Focused Equity Fund – Growth – Direct Plan |
| ICICI Prudential Focused Equity Fund – Direct Plan – Growth |
| Motilal Oswal Focused 25 Fund (MOF25)- Direct Plan Growth Option |
| Sundaram Multi Cap Fund (Formerly Known as Principal Multi Cap Growth Fund)-Direct Plan – Growth Option |
| Sundaram Focused Fund (Formerly Known as Principal Focused Multicap Fund)- Direct Plan – Growth Option |
| IDBI FOCUSED 30 EQUITY FUND – Growth Direct |
Large & Midcap Funds
| Franklin India Equity Advantage Fund – Direct – Growth |
| BOI AXA Large & Mid Cap Equity Fund Direct Plan-Growth |
| ICICI Prudential Large & Mid Cap Fund – Direct Plan – Growth |
| IDFC Core Equity Fund-Direct Plan-Growth |
| Nippon India Vision Fund – Direct Plan Growth Plan – Growth Option |
| Tata Large & MId Cap Fund -Direct Plan- Growth Option |
| UTI – Core Equity Fund – Direct Plan – Growth Option |
| Aditya Birla Sun Life Equity Advantage Fund – Growth – Direct Plan |
| L&T Large and Midcap Fund-Direct Plan-Growth |
| HDFC Large and Mid Cap Fund – Growth Option – Direct Plan |
Large cap funds
| Franklin India Bluechip Fund- Direct – Growth |
| HDFC Top 100 Fund – Growth Option – Direct Plan |
| DSP Top 100 Equity Fund – Direct Plan – Growth |
| HSBC Large Cap Equity Fund – Growth Direct |
| IDFC Large Cap Fund-Direct Plan-Growth |
| Tata Large Cap Fund -Direct Plan Growth Option |
| Aditya Birla Sun Life Frontline Equity Fund – Growth – Direct Plan |
| JM Large Cap Fund (Direct) – Growth Option |
| Taurus Largecap Equity Fund – Direct Plan – Growth |
| LIC MF Large Cap Fund-Direct Plan-Growth |
| L&T India Large Cap Fund – Direct Plan – Growth |
| Navi Large Cap Equity Fund-Direct Plan-Growth Option |
| PGIM India Large Cap Fund – Direct Plan – Growth |
| Union Largecap Fund – Direct Plan – Growth Option |
Midcap funds
| Franklin India Prima Fund – Direct – Growth |
| HDFC Mid-Cap Opportunities Fund – Growth Option – Direct Plan |
| ICICI Prudential MidCap Fund – Direct Plan -Growth |
| Nippon India Growth Fund – Direct Plan Growth Plan – Growth Option |
| SBI Magnum MIDCAP FUND – DIRECT PLAN – GROWTH |
| Taurus Discovery (Midcap) Fund – Direct Plan – Growth |
| Sundaram Mid Cap Fund Direct Plan – Growth |
| Aditya Birla Sun Life Midcap Fund – Growth – Direct Plan |
| quant Mid Cap Fund – Growth Option – Direct Plan |
| BARODA BNP PARIBAS Mid Cap Fund – Direct Plan – Growth Option |
| Motilal Oswal Midcap 30 Fund (MOF30)-Direct Plan-Growth Option |
| BOI AXA MID & SMALL CAP EQUITY & DEBT FUND – DIRECT PLAN GROWTH |
| IDBI Midcap Fund Growth Direct |
Multicap funds
| IDFC MULTI CAP FUND – GROWTH – DIRECT PLAN |
| Nippon India Multi Cap Fund – Direct Plan Growth Plan – Growth Option |
| Baroda BNP Paribas MULTI CAP FUND – Direct Plan – Growth Option |
Flexicap Funds
| Franklin India Flexi Cap Fund – Direct – Growth |
| HDFC Flexi Cap Fund – Growth Option – Direct Plan |
| HSBC Flexi Cap Fund – Growth Direct |
| Taurus Flexi Cap Fund – Direct Plan – Growth |
| Union Flexi Cap Fund – Direct Plan – Growth Option |
| LIC MF Flexi Cap Fund-Direct Plan-Growth |
| L&T Flexicap Fund-Direct Plan-Growth |
| IDBI FLEXI CAP FUND Growth Direct |
| Motilal Oswal Flexi cap Fund Direct Plan-Growth Option |
Sectoral or Thematic funds
| Franklin India Opportunities Fund – Direct – Growth |
| HDFC Infrastructure Fund – Growth Option – Direct Plan |
| ICICI Prudential Infrastructure Fund – Direct Plan -Growth |
| IDFC Infrastructure Fund-Direct Plan-Growth |
| Invesco India PSU Equity Fund – Direct Plan – Growth |
| Nippon India Banking & Financial Services Fund – Direct Plan Growth Plan – Growth Option |
| Nippon India Power & Infra Fund – Direct Plan Growth Plan – Growth Option |
| Nippon India Quant Fund – Direct Plan Growth Plan – Growth Option |
| UTI – MNC Fund – Growth Option – Direct |
| UTI India Consumer Fund – Direct Plan – Growth Option |
| UTI Infrastructure Fund-Growth Option- Direct |
| UTI-Transpotation and LogisticsFund-Growth Option- Direct |
| Aditya Birla Sun Life Infrastructure Fund – Growth – Direct Plan |
| Aditya Birla Sun Life MNC Fund – Growth – Direct Plan |
| Baroda BNP Paribas Banking and Financial Services Fund – Direct – Growth Option |
| SBI PSU Fund – DIRECT PLAN – GROWTH |
| LIC MF Infrastructure Fund-Direct Plan-Growth |
| HSBC Infrastructure Equity Fund – Growth Direct |
| Sundaram Infrastructure Advantage Fund Direct Plan – Growth |
| L&T Business Cycles Fund – Direct Plan – Growth |
| Kotak Infrastructure & Economic Reform Fund- Direct Plan- Growth Option |
| Aditya Birla Sun Life Manufacturing Equity Fund – Direct Plan – Growth |
| LIC MF Banking and Financial Services Fund-Direct Plan-Growth |
| HDFC Housing Opportunities Fund- Growth Option – Direct Plan |
Sectoral/ Thematic (international)
| Franklin Asian Equity Fund – Direct – Growth |
| Aditya Birla Sun Life Commodity Equities Fund – Global Agri Plan – Growth – Direct Plan |
| Aditya Birla Sun Life International Equity Fund – Plan A – Growth – Direct Plan |
| Aditya Birla Sun Life International Equity Fund – Plan B – Growth – Direct Plan |
| Nippon India Japan Equity Fund- Direct Plan- Growth Plan- Growth Option |
Small Cap Funds
| Franklin India Smaller Companies Fund – Direct – Growth |
| Sundaram Small Cap Fund – Direct Plan – Growth Option |
| Aditya Birla Sun Life Small Cap Fund – Growth – Direct Plan |
| HSBC Small Cap Equity Fund – Growth Direct |
| ICICI Prudential Smallcap Fund – Direct Plan – Growth |
| Union Small Cap Fund – Direct Plan – Growth Option |
Value funds
| Aditya Birla Sun Life Pure Value Fund – Growth – Direct Plan |
| UTI Value Opportunities Fund- Direct Plan – Growth Option |
| Indiabulls Value Fund – Direct Plan – Growth Option |
To reiterate: Investors holding these funds need not exit them in a hurry. Please use this as a sign to dig deeper and re-evaluate these funds. A fund absent from this list does not mean it is a “good fund” or an outperformer!
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