10 Mutual Funds That Crashed the Most Since Last Diwali (-14% to -17%)

Diwali often marks a time of new beginnings and portfolio reviews for investors. As we light up our homes this festive season, it’s equally important to review which investments have dimmed in the past year. While some mutual funds have delivered extraordinary returns since the last Diwali, a few have been on the opposite side — witnessing steep declines and eroding investor wealth. In this article, we highlight 10 mutual funds that crashed the most since last Diwali (November 2024 – October 2025), with 1-year returns ranging from -14% to -17%. These funds span across IT, momentum, and flexi-cap categories, reflecting how certain themes and sectors have underperformed over the last year.

Explore 10 Worst Performng Mutual Funds in last 5 years that generated< 2% CAGR returns.

What Are Equity Mutual Funds?

Equity mutual funds invest primarily in shares of companies. These funds aim to generate long-term capital appreciation but come with high volatility. Depending on their investment style, they may focus on sectors (like IT), themes (like momentum), or market caps (like flexi-cap).

While they can generate superior returns during bull markets, sector or theme-specific funds can see sharp drawdowns when market cycles reverse, as we see with this year’s laggards.

How We Identified These Funds

We applied a consistent screening process to identify underperforming funds:

• Considered all equity mutual funds, including sectoral and thematic categories.

• Focused only on Direct Plans (Growth options) to ensure return consistency.

• Analyzed 1-year performance from 20-Oct-2024 to 19-Oct-2025.

• Excluded commodities (Gold/Silver), hybrid, arbitrage, and debt-oriented funds.

• Data as on 19-Oct-2025

🔻 Top 10 Mutual Funds That Crashed the Most Since Last Diwali (-14% to -17%)

Deep Dive into Each Mutual Fund

#1 – Samco Flexi Cap Fund (-17.19%)

Fund Objective:
To invest across large-cap, mid-cap, and small-cap companies with a flexible allocation based on market opportunities.

Annualised Returns:

• 1 Year: -17.19%

• 3 Year: 3.81%

• 5 Year: Not Applicable

• 10 Year: Not Applicable

Who Can Invest:

• Investors seeking long-term wealth creation across market caps.

• Those comfortable with short-term volatility.

Risk Factors:

• Exposure to volatile small and mid-cap segments.

• Aggressive allocation during market corrections can amplify losses.

Earlier we analysed this fund among 10 Mutual Funds that Crashed the Most Since Last Gandhi Jayanthi.

#2 – Axis Nifty IT Index Fund (-16.60%)

Fund Objective:
To replicate the performance of the Nifty IT Index, which represents top technology companies in India.

Annualised Returns:

• 1 Year: -16.60%

• 3 Year: Not Applicable

Who Can Invest:

• Those who want long-term exposure to India’s IT sector.

• Investors with high-risk tolerance.

Risk Factors:

• IT sector slowdown due to global demand uncertainty.

• High dependence on USD-INR movements.

#3 – Bandhan Nifty IT Index Fund (-16.60%)

Fund Objective:
To generate returns that correspond to the performance of the Nifty IT Index.

Annualised Returns:

• 1 Year: -16.60%

• 3 Year: Not Applicable

Who Can Invest:

• Sector-specific investors bullish on Indian technology growth.

Risk Factors:

• Global IT spending cuts.

• High volatility linked to US market trends.

#4 – ICICI Prudential Nifty IT Index Fund (-16.50%)

Fund Objective:
To mirror returns of Nifty IT Index while minimizing tracking error.

Annualised Returns:

• 1 Year: -16.50%

• 3 Year: 9.36%

Who Can Invest:

• Investors seeking passive exposure to the IT theme.

Risk Factors:

• Global macro uncertainty and sector rotation out of IT.

IT Index has been down in the last few months where we covered this fund too in 10 Mutual Funds That Crashed the Most in the Last 6 Months in 2025.

#5 – Nippon India Nifty IT Index Fund (-16.46%)

Fund Objective:
To provide returns closely corresponding to the Nifty IT Index performance.

Annualised Returns:

• 1 Year: -16.46%

Who Can Invest:

• Long-term investors willing to ride IT sector cycles.

Risk Factors:

• Dollar revenue dependence and global recessionary risks.

#6 – Navi Nifty IT Index Fund (-16.40%)

Fund Objective:
To track the Nifty IT Index with minimal tracking error.

Annualised Returns:

• 1 Year: -16.40%

Who Can Invest:

• Those looking for low-cost, passive exposure to Indian IT companies.

Risk Factors:

• High correlation with Nasdaq and global tech valuations.

#7 – Mirae Asset Nifty Smallcap 250 Momentum Quality 100 ETF FoF (-14.85%)

Fund Objective:
To invest in the Mirae Asset Nifty Smallcap 250 Momentum Quality 100 ETF, focusing on small-cap stocks with high momentum and quality parameters.

Annualised Returns:

• 1 Year: -14.85%

Who Can Invest:

• Aggressive investors seeking exposure to high-growth small caps.

Risk Factors:

• High volatility due to small-cap nature.

• Sharp drawdowns during market corrections.

#8 – Quant Manufacturing Fund (-13.91%)

Fund Objective:
To invest in manufacturing and industrial sector companies expected to benefit from India’s production growth.

Annualised Returns:

• 1 Year: -13.91%

Who Can Invest:

• Investors with long-term conviction in India’s manufacturing theme.

Risk Factors:

• Slowdown in industrial activity can affect returns.

• Sector concentration risk.

#9 – Nippon India Nifty 500 Momentum 50 Index Fund (-13.89%)

Fund Objective:
To replicate the Nifty 500 Momentum 50 Index, which captures the most trending stocks within the Nifty 500.

Annualised Returns:

• 1 Year: -13.89%

Who Can Invest:

• High-risk investors focused on momentum-driven strategies.

Risk Factors:

• Trend reversals can lead to rapid underperformance.

The underlying index has generated superior returns earlier. We covered in details in this article at 6 Momentum Index Mutual Funds (Underlying index with 30% to 40% CAGR returns in last 5 years).

#10 – Quant Business Cycle Fund (-13.75%)

Fund Objective:
To invest dynamically across sectors based on business cycle trends.

Annualised Returns:

• 1 Year: -13.75%

Who Can Invest:

• Investors who prefer an active, macro-driven investment approach.

Risk Factors:

• Incorrect cycle predictions can lead to poor outcomes.

• Short-term underperformance during cycle transitions.

Key Takeaways

• IT Sector Drag: Six out of the ten worst-performing funds are IT-based, reflecting global slowdown in technology demand.

• Momentum Funds Hit: Momentum and small-cap strategies faced sharp pullbacks.

• Diversification is Key: Overexposure to one sector or theme can cause steep losses.

Conclusion

While these funds have delivered negative returns since last Diwali, short-term corrections are a part of equity investing. Investors should avoid making panic-driven decisions based on 1-year returns. Instead, focus on diversification, long-term goals, and consistent review of portfolio exposure.

If you hold any of these funds, assess whether their underlying strategy aligns with your investment horizon and risk profile. Sectoral and thematic funds can bounce back quickly when cycles turn, but patience and discipline are key.

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Suresh KP

Founder at Myinvestmentideas.com

Suresh KP is a seasoned financial expert with over 23 years of experience. He is NISM Certified Investment Adviser and Research Analyst. For more about his expertise and certifications, visit About Suresh KP

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