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 April 8th 2022.
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; 1500 two 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.
Let us take, for example, Principal Focused Multicap Fund- Direct Plan. We compare it with Nifty Largemidcap 250 TRI.
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- No of rolling return entries (3 Years) 1472
- No of times the fund has outperformed the index (3 years) 552
- rolling return outperformance Consistency Score (3 years) 38%
- No of rolling return entries (4 Years) 1228
- No of times the fund has outperformed the index (4 years) 506
- rolling return outperformance Consistency Score (4 years) 41%
- No of rolling return entries (5 Years) 981
- No of times the fund has outperformed the index (5 years) 337
- rolling return outperformance Consistency Score (5 years) 34%
Using the April 2022 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 378 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 | 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 140 funds after applying the above filter.
Aggressive Hybrid Funds
| Nippon India Equity Hybrid Fund – Direct Plan Growth Plan |
| Franklin India Equity Hybrid Fund – Direct – Growth |
| BARODA HYBRID EQUITY FUND – Plan B (Direct) – Growth Option |
| Aditya Birla Sun Life Equity Hybrid’95 Fund – Direct Plan-Growth |
| L&T Hybrid Equity Fund – Direct Plan-Growth |
| UTI – Hybrid Equity Fund -Direct Plan – Growth |
| Edelweiss Aggressive Hybrid Fund(G)-Direct Plan |
| Tata Hybrid Equity Fund -Direct Plan- Growth |
| JM Equity Hybrid Fund (Direct) – Growth Option |
Dividend Yield Funds
| Aditya Birla Sun Life Dividend Yield Fund – Growth – Direct Plan |
| UTI-Dividend Yield Fund.-Growth-Direct |
ELSS Funds
| Edelweiss Long Term Equity Fund (Tax Savings) – Direct Plan-Growth Option |
| HSBC Tax Saver Equity Fund – Growth Direct |
| Sundaram Diversified Equity – A Long-term Tax Saver Fund – Direct Plan – Growth Option |
| SBI MAGNUM TAXGAIN SCHEME 1993 – DIRECT PLAN -GROWTH |
| IDBI Equity Advantage Fund – Growth Direct |
| Franklin India TAXSHIELD – Direct – Growth |
| Nippon India Tax Saver Fund – Direct Plan Growth Plan – Growth Option |
| HDFC TaxSaver -Direct Plan – Growth Option |
| Union Tax Saver Scheme – Direct Plan – Growth Option |
| Principal Personal Tax Saver Fund – Direct Plan |
Focussed Funds
| Nippon India Focused Equity Fund – Direct Plan Growth Plan – Growth Option |
| Motilal Oswal Focused 25 Fund (MOF25)- Direct Plan Growth Option |
| Principal Focused Multicap Fund- Direct Plan – Growth Option |
| IDFC Focused Equity Fund-Direct Plan-Growth |
| Sundaram Select Focus – Direct Plan – Growth Option |
| DSP Focus Fund – Direct Plan – Growth |
| Aditya Birla Sun Life Focused Equity Fund – Growth – Direct Plan |
| ICICI Prudential Focused Equity Fund – Direct Plan – Growth |
Large & Midcap Funds
| IDFC Core Equity Fund-Direct Plan-Growth |
| Franklin India Equity Advantage Fund – Direct – Growth |
| L&T Large and Midcap Fund-Direct Plan-Growth |
Largecap funds
| Essel Large Cap Equity Fund-Direct Plan-Growth Option |
| IDBI India Top 100 Equity Fund Growth Direct |
| HDFC Top 100 Fund -Direct Plan – Growth Option |
| Tata Large Cap Fund -Direct Plan Growth |
| HSBC Large Cap Equity Fund – Growth Direct |
| Aditya Birla Sun Life Frontline Equity Fund – Growth – Direct Plan |
| Franklin India Bluechip Fund- Direct – Growth |
| JM Large Cap Fund (Direct) – Growth Option |
| L&T India Large Cap Fund – Direct Plan – Growth |
| Baroda Large cap Fund – Plan B (Direct) – Growth Option |
| IDFC Large Cap Fund-Direct Plan-Growth |
Midcap funds
| Tata Mid Cap Growth Fund – Direct Plan Growth |
| DSP Midcap Fund – Direct Plan – Growth |
| SBI Magnum MIDCAP FUND – DIRECT PLAN – GROWTH |
| L&T Mid Cap Fund-Direct Plan-Growth |
| UTI Mid Cap Fund-Growth Option- Direct |
| HDFC Mid Cap Opportunities Fund -Direct Plan – Growth Option |
| Sundaram Mid Cap Fund- Direct Plan – Growth Option |
| Franklin India Prima Fund – Direct – Growth |
| DHFL Pramerica Midcap Opportunities Fund – Direct Plan – Growth Option |
| PGIM India Midcap Opportunities Fund Direct Plan |
| Quant Mid Cap Fund-Growth Option-Direct Plan |
| Motilal Oswal Midcap 30 Fund (MOF30)-Direct Plan-Growth Option |
| Nippon India Growth Fund – Direct Plan Growth Plan – Growth Option |
| BOI AXA MID & SMALL CAP EQUITY & DEBT FUND – DIRECT PLAN GROWTH |
| Baroda Mid-cap Fund- Plan B (Direct) – Growth Option |
Multicap funds
| IDBI DIVERSIFIED EQUITY FUND Growth Direct |
| Union Multi Cap Fund – Direct Plan – Growth Option |
| ICICI Prudential Multicap Fund – Direct Plan – Growth |
| Franklin India Equity Fund – Direct – Growth |
| IDFC Multi Cap Fund-Direct Plan-Growth |
| HSBC Multi Cap Equity Fund – Growth Direct |
| HDFC Equity Fund -Direct Plan – Growth Option |
| BARODA MULTI CAP FUND – Plan B (Direct) – Growth Option |
Sectoral or Thematic funds
| Tata Infrastructure Fund -Direct Plan Growth |
| Baroda Banking and Financial Services Fund – Plan B (Direct) – Growth Option |
| Canara Robeco Infrastructure-Direct Plan – Growth |
| SBI INFRASTRUCTURE FUND – DIRECT PLAN – GROWTH |
| Franklin India Opportunities Fund – Direct – Growth |
| ICICI Prudential Exports & Services Fund – Direct Plan – Growth |
| Nippon India Banking Fund – Direct Plan Growth Plan – Growth Option |
| IDFC Infrastructure Fund-Direct Plan-Growth |
| Aditya Birla Sun Life Infrastructure Fund – Growth – Direct Plan |
| Invesco India PSU Equity Fund – Direct Plan – Growth |
| UTI-Transpotation and Logistics Fund-Growth Option- Direct |
| Nippon India Power & Infra Fund – Direct Plan Growth Plan – Growth Option |
| HSBC Infrastructure Equity Fund – Growth Direct |
| ICICI Prudential Infrastructure Fund – Direct Plan – Growth |
| Sundaram Infrastructure Advantage Fund (Erstwhile Sundaram Capex Opportunities) Direct Plan Growth |
| HDFC Infrastructure Fund -Direct Plan – Growth Option |
| UTI Infrastructure Fund-Growth Option- Direct |
| Aditya Birla Sun Life Manufacturing Equity Fund – Direct Plan – Growth |
| UTI India Consumer Fund – Direct Plan – Growth Option |
Sectoral/ Thematic (international)
| Franklin Asian Equity Fund – Direct – Growth |
| Aditya Birla Sun Life International Equity Fund – Plan A – Growth – Direct Plan |
| Nippon India Japan Equity Fund- Direct Plan- Growth Plan- Growth Option |
Small Cap Funds
| DSP Small Cap Fund – Direct Plan – Growth |
| Kotak-Small Cap Fund – Growth – Direct |
| HSBC Small Cap Equity Fund – Growth Direct |
| Aditya Birla Sun Life Small Cap Fund – Growth – Direct Plan |
| Sundaram Small Cap Fund – Direct Plan – Growth Option |
| Franklin India Smaller Companies Fund – Direct – Growth |
| Quant Small Cap Fund-Growth Option-Direct Plan |
| Union Small Cap Fund – Direct Plan – Growth Option |
| ICICI Prudential Smallcap Fund – Direct Plan – Growth |
Value funds
| Templeton India Value Fund – Direct – Growth |
| ICICI Prudential Value Discovery Fund – Direct Plan – Growth |
| Aditya Birla Sun Life Pure Value Fund – Growth – Direct Plan |
| UTI Value Opportunities 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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