Mutual funds are a convenient way for investors to access professionally managed portfolios, but they are not immune to market cycles. Over the last six months a handful of schemes — mainly concentrated in the technology/theme space — have seen steep NAV drops. This article lists 10 Mutual Funds That Crashed the Most in the Last 6 Months, examines why they fell, and provides a fund-by-fund deep dive to help you decide whether to hold, exit or add on weakness.
Investors can also read 10 Worst Performing Mutual Funds in the Last 5 Years (1.7% to 9.1% CAGR Returns)
What are Mutual Funds?
A mutual fund pools money from many investors and invests it across stocks, bonds or other securities according to a stated objective. While diversified funds spread risk, sectoral and thematic funds concentrate exposure and therefore tend to be more volatile.
Top 10 Mutual Funds That Fell Between 9% to 18% in the Last 6 Months
| Fund Name | 6-Month Return (%) |
|---|---|
| Axis Nifty IT Index Fund – Direct Plan | -18.37 |
| Bandhan Nifty IT Index Fund – Direct Plan | -18.36 |
| Nippon India Nifty IT Index Fund – Direct Plan | -18.26 |
| ICICI Prudential Nifty IT Index Fund – Direct Plan | -18.24 |
| Navi Nifty IT Index Fund – Direct Plan | -18.21 |
| Tata Digital India Fund – Direct Plan | -11.89 |
| Shriram Multi Sector Rotation Fund – Direct Plan | -11.34 |
| Motilal Oswal Nifty MidSmall IT and Telecom Index Fund – Direct Plan | -10.86 |
| ICICI Prudential Technology Fund – Direct Plan | -9.09 |
| Aditya Birla Sun Life Digital India Fund – Direct Plan | -8.79 |
Note: The list above is based on 6-month NAV movement and includes index/sectoral and actively managed technology/digital-themed funds. Some schemes show limited long-term data (NA) in official disclosures.
Even in the long term there are 10 Worst Performing Mutual Funds in the Last 10 Years (0.72% to 6.2% CAGR Returns)
Deep Dive: Fund-wise Analysis
Below each scheme is explained in brief — fund objective, annualised returns where available, who should consider the fund and the main risk factors.
#1 – Axis Nifty IT Index Fund – Direct Plan
- Fund Objective: Track the Nifty IT Index to deliver returns close to the index.
- 6-Month Return: -18.37%
- Annualised Returns:
- 1 Year: -9.79%
- 3 Years: N/A
- 5 Years: N/A
- 10 Years: N/A
- Who Can Invest: Investors seeking low-cost, passive exposure to India’s large-cap IT names and who understand sector concentration risk.
- Risk Factors: High sector concentration, sensitivity to global IT spend cycles, currency volatility and large-cap IT valuation swings.
#2 – Bandhan Nifty IT Index Fund – Direct Plan
- Fund Objective: Replicate the Nifty IT Index.
- 6-Month Return: -18.36%
- Annualised Returns:
- 1 Year: -9.76%
- 3 Years: N/A
- 5 Years: N/A
- 10 Years: N/A
- Who Can Invest: Long-term investors bullish on the IT sector who prefer passive index exposure.
- Risk Factors: Sector-specific downturns and benchmark tracking errors during volatile markets.
#3 – Nippon India Nifty IT Index Fund – Direct Plan
- Fund Objective: Passive tracking of Nifty IT Index constituents.
- 6-Month Return: -18.26%
- Annualised Returns:
- 1 Year: -9.65%
- 3 Years: N/A
- 5 Years: N/A
- 10 Years: N/A
- Who Can Invest: Cost-conscious investors seeking representative exposure to India’s IT large-caps.
- Risk Factors: Reliance on a narrow sector, global demand shocks for IT services, and forex impacts.
#4 – ICICI Prudential Nifty IT Index Fund – Direct Plan
- Fund Objective: Provide returns in line with the Nifty IT Index.
- 6-Month Return: -18.24%
- Annualised Returns:
- 1 Year: -9.70%
- 3 Years: N/A
- 5 Years: N/A
- 10 Years: N/A
- Who Can Invest: Investors wanting passive IT exposure with a large, well-known fund house backing.
- Risk Factors: Index concentration, corporate earnings volatility in IT, and offshore demand weakness.
#5 – Navi Nifty IT Index Fund – Direct Plan
- Fund Objective: Track Nifty IT Index composition and returns.
- 6-Month Return: -18.21%
- Annualised Returns:
- 1 Year: -9.61%
- 3 Years: N/A
- 5 Years: N/A
- 10 Years: N/A
- Who Can Invest: Passive investors who accept short-term swings for potential long-term IT sector gains.
- Risk Factors: Sector concentration, liquidity in some index constituents, and global tech demand cycles.
#6 – Tata Digital India Fund – Direct Plan
- Fund Objective: Invest primarily in digital- and technology-enabled companies across market caps.
- 6-Month Return: -11.89%
- Annualised Returns:
- 1 Year: -5.38%
- 3 Years: 13.25%
- 5 Years: 23.13%
- 10 Years: N/A
- Who Can Invest: Investors convinced by India’s digital adoption story and willing to tolerate volatility for higher returns.
- Risk Factors: Thematic concentration risk, regulatory or policy changes affecting digital businesses, and earnings cyclicality.
#7 – Shriram Multi Sector Rotation Fund – Direct Plan
- Fund Objective: Tactical allocation across sectors—aims to rotate into stronger sectors and reduce allocation to weak ones.
- 6-Month Return: -11.34%
- Annualised Returns:
- 1 Year: N/A
- 3 Years: N/A
- 5 Years: N/A
- 10 Years: N/A
- Who Can Invest: Investors who seek dynamic sector allocation but are comfortable with the manager’s timing decisions.
- Risk Factors: Execution risk in timing rotations, higher turnover, and potential lag versus benchmark during sudden reversals.
#8 – Motilal Oswal Nifty MidSmall IT and Telecom Index Fund – Direct Plan
- Fund Objective: Track a mid/small-cap focused index of IT and telecom companies.
- 6-Month Return: -10.86%
- Annualised Returns:
- 1 Year: N/A
- 3 Years: N/A
- 5 Years: N/A
- 10 Years: N/A
- Who Can Invest: Aggressive investors seeking concentrated mid/small-cap exposure within IT and telecom.
- Risk Factors: Higher volatility, lower liquidity in mid/small caps, and earnings sensitivity to client demand.
#9 – ICICI Prudential Technology Fund – Direct Plan
- Fund Objective: Actively managed fund investing in technology-related companies across caps.
- 6-Month Return: -9.09% (note: slightly below 10% threshold but included given thematic similarity)
- Annualised Returns:
- 1 Year: -1.52%
- 3 Years: 12.79%
- 5 Years: 23.59%
- 10 Years: 17.54%
- Who Can Invest: Long-term investors seeking active stock-picking in the tech theme with an experienced fund manager.
- Risk Factors: Active-management risk, sector concentration, and vulnerability to global tech cycles.
#10 – Aditya Birla Sun Life Digital India Fund – Direct Plan
- Fund Objective: Invests in companies enabling digital adoption and transformation.
- 6-Month Return: -8.79%
- Annualised Returns:
- 1 Year: -4.83%
- 3 Years: 12.55%
- 5 Years: 21.63%
- 10 Years: 17.74%
- Who Can Invest: Investors looking for diversified exposure to the digital theme with a multi-cap approach.
- Risk Factors: Sector slowdown, valuation compression, and regulatory changes impacting digital businesses.
Investors who would have invested for long term also go through 10 Worst Performing Mutual Funds in the Last 20 Years (4.8% to 11.9% CAGR Returns)
Why These Funds Fell — Quick Summary
- Trump Tariff War: Recently, mutual funds have seen a dip due to global market jitters linked to the Trump Tariff war, which triggered short-term selling pressure in equities.
- Sector Concentration: Most falling schemes are tech/ digital-themed or sectoral index funds, so weakness was amplified.
- Global IT Demand: Slower enterprise spending and macro uncertainty dented revenue visibility for many IT firms.
- Profit Booking & Valuation Re-rating: After multi-year gains in tech and digital stocks, profit-taking accelerated the correction.
- Currency & Rate Sensitivity: USD/INR moves and higher global rates can pressure earnings and valuations.
What Should Investors Do Now?
- Check investment horizon: If you’re long-term (5+ years) and believe in the theme, averaging may make sense.
- Re-assess allocation: Avoid over-concentration—ensure your portfolio is diversified.
- Compare with peers and benchmark: If underperformance is fund-specific (not sector-wide), consider switching.
- Use dips selectively: For new investors, selectively adding to fundamentally strong funds during corrections can improve long-term returns. Check our article about Best Mutual Funds to invest in 2025 in Lumpsum during such market corrections.
Conclusion
The last six months were challenging for IT and digital-themed mutual funds — several index-tracking and active schemes fell sharply. While short-term crashes are painful, they can also create opportunities for investors who remain disciplined and focused on long-term fundamentals. Before acting, review your risk tolerance, time horizon, and whether the fund’s strategy still fits your financial plan.
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