The Indian stock market has taken good correction in the last 6 months and started recovering in the last few days. Nifty50 has generated over 150% returns in the last 5 years (20-Apr-2020 to 19-April-2025) which turns out to be 20% CAGR returns. However there are several mutual funds that generated below 9% CAGR returns in last 5 years. You might be wondering when Nifty has such good returns in the past 5 years and majority of the active funds generated double digit annualised returns, how come there are mutual funds generating such low returns. Let’s get into more details about such funds. In this article, we will discuss the 10 Worst Performing Mutual Funds in the Last 5 Years (20-April-2020 to 19-April-2025).
How We Identified These Worst Performing Mutual Funds?
Earlier we wrote about Worst Performing Mutual Funds in last 3 years and we are continuing this series.
- We considered all equity mutual funds, including sectoral and thematic funds and global funds.
- We excluded ETFs from this list.
- We filtered the bottom 10 funds based on their 5-year returns.
- These 10 funds generated 1.7% to 9.1% annualised returns in the Last 5 Years.
List of 10 Worst Performing Mutual Funds in the Last 5 Years
Here are the 10 worst-performing mutual funds based on their 5-year annualised returns:
| Fund Name | 5 Yr Annualised Return (%) |
|---|---|
| Edelweiss Greater China Equity Off-shore Fund | 1.70 |
| HSBC Brazil Fund | 3.50 |
| PGIM India Emerging Markets Equity Fund | 4.24 |
| Edelweiss Emerging Markets Opportunities Equity Offshore Fund | 4.70 |
| Franklin Asian Equity Fund | 5.40 |
| HSBC Global Emerging Markets Fund | 7.10 |
| Franklin India Feeder – Templeton European Opportunities Fund | 7.70 |
| Kotak Global Emerging Market | 8.20 |
| HSBC Asia Pacific (Ex Japan) Dividend Yield Fund | 8.80 |
| ICICI Prudential Global Advantage Fund (FOF) – Direct Plan | 9.10 |
Deep Dive into These Worst Performing Mutual Funds
Let’s explore these funds in detail, their objectives, performance, and our view.
#1 – Edelweiss Greater China Equity Off-shore Fund – 5-Year CAGR Return: 1.7%
Investment Objective: The scheme aims to provide long-term capital appreciation by investing in companies in the Greater China region.
Annualised Returns:
- 1 Year: 11.5%
- 3 Year: -2.1%
- 5 Year: 1.7%
- 10 Year: 5.9% (₹ 1 Lakh would have turned to 1.77 Lakhs)
Expense Ratio: 1.42% (Direct plan)
Beta: 0.34 indicating low volatility.
Alpha: -6.5 indicating lower risk-adjusted returns.
Our View: The Edelweiss Greater China Equity Off-shore Fund has seen modest long-term performance, with a 5-year CAGR of just 1.7%. While there has been a recent uptick in 1-year returns, the fund continues to reflect the broader underperformance of the Chinese equity markets. Though some FIIs are shifting focus back to China, the long-term outlook remains uncertain due to geopolitical tensions and economic headwinds. Investors should remain cautious and avoid overexposure. Instead, they can consider allocating a small portion of their portfolio to global funds—preferably those with a consistent track record across regions. Diversification is key, and there are several top-performing international mutual funds worth considering in 2025.
#2 – HSBC Brazil Fund – 5-Year CAGR Return: 3.5%
Investment Objective: To provide long-term capital growth by investing in Brazil-focused equities.
Annualised Returns:
- 1 Year: -6.3%
- 3 Year: -3.9%
- 5 Year: 3.5%
- 10 Year: 0.4% (₹ 1 Lakh would have turned to 1.04 Lakhs)
Expense Ratio: 0.93% (Direct plan)
Beta: 0.43 indicating low volatility.
Alpha: -9.8 indicating poor risk-adjusted performance.
Our View: The HSBC Brazil Fund has delivered lacklustre long-term performance, with a 10-year return of just 0.4%, and recent returns also remain in negative territory. Despite Brazil’s potential as an emerging market, poor risk-adjusted performance make this fund a high-risk option. Given the ongoing macroeconomic and political challenges in Brazil, investors may be better off avoiding such underperforming regions. As always, it’s wise to stick to a disciplined asset allocation strategy and consider allocating only a small portion of the portfolio to international funds with a consistent track record.
Above fund is part of Worst Performing Mutual Funds in last 1 year article too.
#3 – PGIM India Emerging Markets Equity Fund – 5-Year CAGR Return: 4.2%
Investment Objective: This fund focuses on opportunities in emerging market equities excluding India.
Annualised Returns:
- 1 Year: 10.4%
- 3 Year: 2.7%
- 5 Year: 4.2%
- 10 Year: 2.6% (₹ 1 Lakh would have turned to 1.29 Lakhs)
Expense Ratio: 1.38% (Direct plan)
Beta: 0.43 indicating low volatility.
Alpha: -3.7 indicating poor risk adjusted returns.
Our View: While the PGIM India Emerging Markets Equity Fund aims to tap into growth across emerging markets (excluding India), its long-term performance has been relatively low. With a 10-year CAGR of just 2.6% and a 5-year CAGR of 4.2%, the returns have not lived up to expectations. Despite a relatively low Beta indicating lower volatility, the negative Alpha suggests subpar risk-adjusted returns. As highlighted earlier, investors should be cautious about allocating significant portions to underperforming or inconsistent international markets. A better approach is to maintain a well-diversified portfolio and consider global funds with strong and stable performance.
#4 – Edelweiss Emerging Markets Opportunities Equity Offshore Fund – 5-Year CAGR Return: 4.7%
Investment Objective: Invests in JPMorgan Funds – Emerging Markets Opportunities Fund for long-term capital appreciation.
Annualised Returns:
- 1 Year: 3.8%
- 3 Year: 1.7%
- 5 Year: 4.7%
- 10 Year: 4.1% (₹ 1 Lakh would have turned to 1.49 Lakhs)
Expense Ratio: 1.46% (Direct plan)
Beta: 0.52 indicating low volatility.
Alpha: -6.2 indicating poor performance relative to risk.
Our View: This fund’s performance has remained below par, despite its exposure to diverse emerging markets. The combination of a relatively high expense ratio and weak Alpha indicates that the fund has not generated enough risk-adjusted returns to justify its cost. Investors looking to diversify internationally should consider alternative global funds with stronger historical performance and more consistent Alpha.
#5 – Franklin Asian Equity Fund – 5-Year CAGR Return: 5.4%
Investment Objective: Invests in companies across Asia (excluding Japan) for capital appreciation.
Annualised Returns:
- 1 Year: 8.08%
- 3 Year: 2.0%
- 5 Year: 5.4%
- 10 Year: 5.3% (₹ 1 Lakh would have turned to 1.68 Lakhs)
Expense Ratio: 1.59% (Direct plan)
Beta: 0.61 indicating lower volatility.
Alpha: -6.71 indicating poor returns for the risk taken.
Our View: The Franklin Asian Equity Fund provides exposure to Asian markets (excluding Japan), but its long-term performance has been fairly average. Despite decent 1-year returns, the 5-year and 10-year CAGRs remain modest at 5.4% and 5.3% respectively. A Beta of 0.61 suggests lower volatility, but the significantly negative Alpha (-6.71) indicates poor compensation for the risk taken. Given the inconsistent performance of many Asian markets and the fund’s inability to generate strong risk-adjusted returns, investors should may review and invest in appropriate funds. Investors can look at 20 Equity Funds that has low Beta with High Alpha for investment.
#6 – HSBC Global Emerging Markets Fund – 5-Year CAGR Return: 7.1%
Investment Objective: Invests in emerging markets globally to generate long-term returns.
Annualised Returns:
- 1 Year: 8.2%
- 3 Year: 1.2%
- 5 Year: 7.1%
- 10 Year: 4.9% (₹ 1 Lakh would have turned to 1.61 Lakhs)
Expense Ratio: 0.72% (Direct plan)
Beta: 0.47 indicating low volatility.
Alpha: -6.1 indicating poor risk adjusted returns.
Our View: While this fund has performed better than others on this list, it still lags behind many domestic and global peers. The negative Alpha suggests the returns haven’t been satisfactory when adjusted for risk. Emerging markets can be volatile, and this fund’s performance reflects that inconsistency. Investors should evaluate whether this fits within their broader portfolio strategy.
#7 – Franklin India Feeder – Templeton European Opportunities Fund – 5-Year CAGR Return: 7.7%
Investment Objective: Invests in Franklin European Growth Fund focusing on European equities.
Annualised Returns:
- 1 Year: 4.6%
- 3 Year: 4.3%
- 5 Year: 7.7%
- 10 Year: 2.2% (₹ 1 Lakh would have turned to 1.25 Lakhs)
Expense Ratio: 1.30% (Direct plan)
Beta: 0.27 indicating low volatility.
Alpha: -2.87 indicating poor risk-adjusted returns.
Our View: This fund’s European exposure has not translated into strong returns historically. A relatively high expense ratio and marginally negative Alpha reduce its appeal. While Europe has shown signs of recovery in certain sectors, investors may want to consider diversified global funds or developed market funds with better consistency and lower costs. Otherwise they can stick to Indian stock market and invest in Diversified Mutual Funds Portfolio list in 2025.
#8 – Kotak Global Emerging Market Fund – 5-Year CAGR Return: 8.2%
Investment Objective: To provide long-term capital growth by investing in emerging markets across the globe.
Annualised Returns:
- 1 Year: 3.2%
- 3 Year: 2.6%
- 5 Year: 8.2%
- 10 Year: 4.2% (₹ 1 Lakh would have turned to 1.51 Lakhs)
Expense Ratio: 1.3% (Direct plan)
Beta: NA
Alpha: NA
Our View: The Fund has shown relatively better performance among its peers, with an 8.2% CAGR over 5 years. However, its 10-year return of 4.2% remains low, reflecting the overall volatility and unpredictability of emerging markets. Investors looking for international exposure should focus on funds with a strong long-term track record across market cycles.
#9 – HSBC Asia Pacific (Ex Japan) Dividend Yield Fund – 5-Year CAGR Return: 8.8%
Investment Objective: Invests in high dividend-yielding companies in the Asia-Pacific region excluding Japan.
Annualised Returns:
- 1 Year: 10.4%
- 3 Year: 3.7%
- 5 Year: 8.8%
- 10 Year: 7.1% (₹ 1 Lakh would have turned to 1.98 Lakhs)
Expense Ratio: 0.9% (Direct plan)
Beta: 0.4 indicating lower risk.
Alpha: -3.52 suggesting poor risk-adjusted returns.
Our View: This fund stands out with one of the better long-term performances among any of the above international funds, delivering a solid 10-year CAGR of 7.1%. Its focus on high dividend-yielding companies has helped generate relatively stable returns, with a respectable 5-year CAGR of 8.8%. The fund also shows lower risk (Beta of 0.4), though the negative Alpha (-3.52) indicates it hasn’t delivered strong returns relative to the risk taken. While not without drawbacks, this fund could suit investors seeking exposure to income-generating equities in the Asia-Pacific region.
#10 – ICICI Prudential Global Advantage Fund (FOF) – Direct Plan – 5-Year CAGR Return: 9.1%
Investment Objective: Invests in international funds focusing on global opportunities for long-term growth.
Annualised Returns:
- 1 Year: 15.1%
- 3 Year: 7.3%
- 5 Year: 9.1%
- 10 Year: NA
Expense Ratio: 0.59% (Direct plan)
Beta: 0.29 indicating moderate volatility.
Alpha: -0.09 indicating poor risk-adjusted performance.
Our View: The fund has delivered strong short to medium-term returns, with a solid 5-year CAGR of 9.1% and impressive 1-year and 3-year performance. With a low expense ratio of 0.59% and moderate volatility (Beta of 0.29), it offers efficient global exposure. However, the near-zero Alpha (-0.09) suggests the returns haven’t significantly outpaced the risk taken. Despite this, the fund stands out for its consistency and broad global diversification. For investors looking to allocate a portion of their portfolio to international markets, this fund could be a promising option in 2025.
Final Thoughts
You might be wondering what to do if you have invested in any of these funds. First review whether such funds align to your financial goals, risk appetite and tenure of investment. Then check for short to medium to long term performance along with stock market performance under which these funds are investing and take a decision whether to continue or exit.
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