List of worst equity mutual funds (Jan 2013 to Mar 2021)

Published: March 28, 2021 at 10:03 am

This is a list of the worst-performing equity mutual funds over every possible five, four, three and two year period between 1st Jan 2013 (introduction date of direct plans) to March 8th 2021.

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. Some funds that we could recollect from memory have been removed. An exhaustive filtration 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; we are trying to make some money! 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 and 2Y return periods.

Let us take, for example, Principal Focused Multicap Fund- Direct Plan. We compare it with Nifty Largemidcap 250 TRI.

  • No of rolling return entries (2 Years) 1519
  • No of times fund has outperformed the index (2 years) 474
  • rolling return outperformance Consistency Score (2 years) 31%(474/1519)
  • No of rolling return entries (3 Years) 1272
  • No of times fund has outperformed the index (3 years) 352
  • rolling return outperformance Consistency Score (3 years) 28%
  • No of rolling return entries (4 Years) 1025
  • No of times fund has outperformed the index (4 years) 303
  • rolling return outperformance Consistency Score (4 years) 30%
  • No of rolling return entries (5 Years) 780
  • No of times fund has outperformed the index (5 years) 199
  • rolling return outperformance Consistency Score (5 years) 26%

Using the March 2021 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 and two years. This will be our definition of a “worst fund”. We make no claim of superiority over this definition. We just this it is reasonable.

The filtration process

A total of 368 equity mutual funds were studied from these categories and against these benchmarks.

Aggressive Hybrid FundCRISIL 65:35 Aggressive Hybrid Index
Contra FundNifty 100 TRI
Dividend Yield FundNifty 100 TRI
Large Cap FundNifty 100 TRI
ELSSNifty 100 TRI
Focussed FundNifty Largemidcap 250 TRI
Large & Mid Cap FundNifty Largemidcap 250 TRI
Multi-Cap FundNifty Largemidcap 250 TRI
Sectoral/ ThematicNifty Largemidcap 250 TRI
Value FundNifty Largemidcap 250 TRI
Mid Cap FundNiftyMidcap150TRI
Small Cap FundNiftyMidcap150TRI

We are left with 95 funds after applying the above filter.

Aggressive Hybrid Funds

  1. BARODA HYBRID EQUITY FUND – Plan B (Direct) – Growth Option
  2. JM Equity Hybrid Fund (Direct) – Growth Option
  3. Kotak Equity Hybrid – Growth – Direct
  4. LIC MF Equity Hybrid Fund-Direct Plan-Growth
  5. Shriram Hybrid Equity Fund- Direct-Growth

Contra Fund


Dividend Yield Funds

  1. Aditya Birla Sun Life Dividend Yield Fund – Growth – Direct Plan
  2. ICICI Prudential Dividend Yield Equity Fund Direct Plan-Growth Option
  3. UTI-Dividend Yield Fund.-Growth-Direct

ELSS Funds

  1. Baroda ELSS 96 Plan B(Direct) -Growth Option
  2. Essel Long Term Advantage Fund- Direct Plan-Growth Option
  3. HDFC TaxSaver -Direct Plan-Growth Option
  4. Principal Personal Tax Saver Fund – Direct Plan
  5. Reliance Tax Saver Fund – Direct Plan-Growth Plan – Growth Option
  7. Union Tax Saver Scheme – Direct Plan-Growth Option

Focussed Funds

  1. Aditya Birla Sun Life Focused Equity Fund – Growth – Direct Plan
  2. HDFC Focused 30 Fund -Direct Plan-Growth Option
  3. ICICI Prudential Focused Equity Fund – Direct Plan-Growth
  4. IDFC Focused Equity Fund-Direct Plan-Growth
  5. Principal Focused Multicap Fund- Direct Plan-Growth Option
  6. Sundaram Select Focus – Direct Plan-Growth Option

Large & Midcap Funds

  1. BOI AXA Large & Mid Cap Equity Fund Direct Plan-Growth
  2. Essel Large & Midcap Fund- Direct Plan-Growth Option
  3. Franklin India Equity Advantage Fund – Direct-Growth
  4. HDFC Growth Opportunities Fund – Direct-Growth Plan
  5. ICICI Prudential Large & Mid Cap Fund – Direct Plan-Growth
  6. IDFC Core Equity Fund-Direct Plan-Growth
  7. L&T Large and Midcap Fund-Direct Plan-Growth
  8. Reliance Vision Fund – Direct Plan-Growth Plan – Growth Option
  9. UTI – Core Equity Fund – Direct Plan-Growth Option

Largecap funds

  1. Baroda Large cap Fund – Plan B (Direct) – Growth Option
  2. DSP Top 100 Equity Fund – Direct Plan-Growth
  3. Franklin India Bluechip Fund- Direct-Growth
  4. IDFC Large Cap Fund-Direct Plan-Growth
  5. JM Large Cap Fund (Direct) – Growth Option
  6. L&T India Large Cap Fund – Direct Plan-Growth
  7. Tata Large Cap Fund -Direct Plan-Growth
  8. Taurus Largecap Equity Fund-Direct Plan-Growth Option

Midcap funds

  1. Aditya Birla Sun Life Midcap Fund – Growth – Direct Plan
  2. Baroda Mid-cap Fund- Plan B (Direct) – Growth Option
  3. DHFL Pramerica Midcap Opportunities Fund – Direct Plan-Growth Option
  4. Motilal Oswal Midcap 30 Fund (MOF30)-Direct Plan-Growth Option
  5. Reliance Growth Fund – Direct Plan-Growth Plan – Growth Option
  7. Sundaram Mid Cap Fund- Direct Plan-Growth Option
  8. UTI Mid Cap Fund-Growth Option- Direct

Multicap funds

  1. BARODA MULTI CAP FUND – Plan B (Direct) – Growth Option
  2. Canara Robeco Equity Diversified Fund-Direct Plan -Growth Option
  3. Franklin India Equity Fund – Direct-Growth
  4. HDFC Equity Fund -Direct Plan-Growth Option
  5. HSBC Multi-Cap Equity Fund – Growth Direct
  7. IDFC Multi Cap Fund-Direct Plan-Growth
  8. L&T Equity Fund-Direct Plan-Growth
  9. LIC MF Multicap Fund-Direct Plan-Growth
  10. Reliance Multi Cap Fund – Direct Plan-Growth Plan – Growth Option
  11. SBI Magnum Multicap Fund – DIRECT PLAN – Growth Option
  12. Sundaram Multi-Asset Fund Direct-Growth
  13. Taurus Star share (Multi Cap) Fund -Direct Plan-Growth Option
  14. Union Multi-Cap Fund – Direct Plan-Growth Option
  15. UTI – Equity Fund-Growth Option – Direct

Sectoral or Thematic funds

  1. Aditya Birla Sun Life Commodity Equities Fund – Global Agri Plan-Growth – Direct Plan
  2. Aditya Birla Sun Life International Equity Fund – Plan A – Growth – Direct Plan
  3. Aditya Birla Sun Life International Equity Fund – Plan B – Growth – Direct Plan
  4. Aditya Birla Sun Life Manufacturing Equity Fund – Direct Plan-Growth
  5. Franklin Asian Equity Fund – Direct-Growth
  6. HDFC Infrastructure Fund -Direct Plan-Growth Option
  7. HSBC Infrastructure Equity Fund – Growth Direct
  8. ICICI Prudential Infrastructure Fund – Direct Plan-Growth
  9. Kotak Infrastructure & Economic Reform Fund- Direct Plan-Growth Option
  10. L&T Business Cycles Fund – Direct Plan-Growth
  11. LIC MF Banking and Financial Services Fund-Direct Plan-Growth
  12. LIC MF Infrastructure Fund-Direct Plan-Growth
  13. Reliance Consumption Fund – Direct Plan-Growth Plan – Growth Option
  14. Reliance Japan Equity Fund- Direct Plan-Growth Plan- Growth Option
  15. Reliance Power & Infra Fund – Direct Plan-Growth Plan – Growth Option
  16. Reliance Quant Fund – Direct Plan-Growth Plan – Growth Option
  18. Sundaram Infrastructure Advantage Fund (Erstwhile Sundaram Capex Opportunities) Direct Plan-Growth
  19. UTI Healthcare Fund – Direct Plan-Growth Option
  20. UTI India Consumer Fund – Direct Plan-Growth Option
  21. UTI Infrastructure Fund-Growth Option- Direct

Small cap funds

  1. HSBC Small Cap Equity Fund – Growth Direct
  2. ICICI Prudential Smallcap Fund – Direct Plan-Growth
  3. Sundaram Small Cap Fund – Direct Plan-Growth Option
  4. Union Small Cap Fund – Direct Plan-Growth Option

Value funds

  1. Indiabulls Value Discovery Fund – Direct Plan-Growth Option
  2. UTI Value Opportunities Fund- Direct Plan-Growth Option

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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