List of worst equity mutual funds (Jan 2013 to Jan 2023)

Published: January 8, 2023 at 6:00 am

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.

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.


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    • 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.

    CategoryBenchmark
    Aggressive Hybrid FundCrisil6535
    Dividend Yield FundNifty 100 TRI
    ELSSN200TRI
    Focussed FundNifty Largemidcap 250 TRI
    Large & Mid Cap FundNifty Largemidcap 250 TRI
    Large Cap FundNifty 100 TRI
    Mid Cap FundNiftyMidcap150TRI
    Multi Cap FundNifty500 Multicap 50:25:25 TRI
    Flexi Cap FundNifty Largemidcap 250 TRI
    Sectoral/ ThematicNifty 100 TRI
    Sectoral/ Thematic (international)Nifty 100 TRI
    Small Cap FundNiftyMidcap150TRI
    Value FundNifty 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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