While most investors prefer talking about top-performing mutual funds, analysing poor performers is equally important. The last one year has been challenging for several equity segments, especially sectoral themes like realty, IT, momentum strategies, and select small- and mid-cap funds. Sharp corrections, profit booking, global uncertainties, and valuation resets have dragged down returns for many schemes. In this article, we analyse 20 worst performing mutual funds in the last 1 year, based on data as of 31 December 2025, where returns range between -11% and -19%. This analysis can help investors review their portfolios, avoid emotional decisions, and understand why some funds struggle during specific market cycles.
Earlier we explored 10 Mutual Funds That Crashed the Most Since Last Diwali (-14% to -17%).
How We Filtered These Mutual Funds
To shortlist the worst-performing schemes in a transparent manner, we followed a simple and consistent approach:
- Considered only equity-oriented mutual fundss
- Analysed 1-year absolute returns as of 30-Dec-2025
- Selected funds that delivered negative returns in the last one year
- Ranked the bottom 20 schemes with returns ranging from -11% to -19%
Most of these funds belong to sectoral indices, momentum strategies, or relatively volatile market segments such as small-cap and mid-cap stocks.
List of 20 Worst Performing Mutual Funds in the Last 1 Year
| MF Scheme Name | 1 Yr Ret (%) |
|---|---|
| Shriram Multi Sector Rotation Fund | -18.90 |
| Samco Flexi Cap Fund | -18.25 |
| Tata Nifty Realty Index Fund | -17.68 |
| Nippon India Nifty Realty Index Fund | -17.64 |
| HDFC NIFTY Realty Index Fund | -17.58 |
| Quant Teck Fund | -15.57 |
| Samco Active Momentum Fund | -14.88 |
| Union Active Momentum Fund | -14.50 |
| Mirae Asset Nifty Smallcap 250 Momentum Quality 100 ETF FoF | -12.81 |
| Motilal Oswal Midcap Fund | -12.51 |
| Samco ELSS Tax Saver Fund | -12.49 |
| DSP Nifty Smallcap250 Quality 50 Index Fund | -12.41 |
| LIC MF Small Cap Fund | -12.17 |
| Tata Small Cap Fund | -11.97 |
| Bandhan Nifty IT Index Fund | -11.83 |
| Axis Nifty IT Index Fund | -11.79 |
| Nippon India Nifty IT Index Fund | -11.73 |
| ICICI Prudential Nifty IT Index Fund | -11.71 |
| Navi Nifty IT Index Fund | -11.70 |
| Bandhan Nifty Alpha 50 Index Fund | -11.37 |
Deep Dive into 20 Worst Performing Mutual Funds
Many of these funds were floated in the last few years, hence 3 years or 5 years or 10 years performance is not applicable to them.
1. Shriram Multi Sector Rotation Fund
Fund Objective: The fund follows a sector rotation strategy by dynamically shifting allocations across sectors based on market trends and valuation signals.
Performance Snapshot:
- 1-Year Return: -18.90%
Who Can Invest:
- Investors with high risk appetite
- Those who understand sector rotation cycles
Risk Factors:
- Wrong sector timing can hurt returns
- High portfolio churn and volatility
2. Samco Flexi Cap Fund
Fund Objective: Invests across large-, mid-, and small-cap stocks with a flexible allocation approach.
Performance Snapshot:
- 1-Year Return: -18.25%
- 3-Year CAGR: 3.17%
Who Can Invest:
- Long-term investors willing to tolerate short-term underperformance
Risk Factors:
- Concentrated bets and mid/small-cap exposure
We gave this fund as an example which has high Beta and negative Alpha that can be avoided in our article 20 Equity Mutual Funds with Low Beta and High Alpha.
3. Tata Nifty Realty Index Fund
Fund Objective: Tracks the Nifty Realty Index, offering exposure to real estate and allied companies.
Performance Snapshot:
- 1-Year Return: -17.68%
Who Can Invest:
- Investors bullish on long-term real estate growth
Risk Factors:
- Sector-specific risks
- Cyclical nature of realty stocks
4. Nippon India Nifty Realty Index Fund
Fund Objective: Replicates the Nifty Realty Index with exposure to leading real estate companies.
Performance Snapshot:
- 1-Year Return: -17.64%
Who Can Invest:
- Investors comfortable with sector concentration
Risk Factors:
- Interest rate sensitivity
- Economic slowdown impact
5. HDFC NIFTY Realty Index Fund
Fund Objective: Passive fund tracking the Nifty Realty Index.
Performance Snapshot:
- 1-Year Return: -17.58%
Who Can Invest:
- Long-term investors betting on realty revival
Risk Factors:
- High volatility
- Sector dependency
6. Quant Teck Fund
Fund Objective: Thematic fund focused on technology and digital businesses.
Performance Snapshot:
- 1-Year Return: -15.57%
Who Can Invest:
- Thematic investors with long investment horizon
Risk Factors:
- Global tech slowdown
- Valuation corrections
7. Samco Active Momentum Fund
Fund Objective: Uses momentum-based strategies to identify high-performing stocks.
Performance Snapshot:
- 1-Year Return: -14.88%
Who Can Invest:
- Aggressive investors who understand momentum cycles
Risk Factors:
- Momentum reversals
- High portfolio churn
8. Union Active Momentum Fund
Fund Objective: Invests in stocks exhibiting strong price momentum.
Performance Snapshot:
- 1-Year Return: -14.50%
Who Can Invest:
- High-risk investors
Risk Factors:
- Sharp drawdowns during corrections
9. Mirae Asset Nifty Smallcap 250 Momentum Quality 100 ETF FoF
Fund Objective: Invests in ETF tracking momentum and quality-based small-cap stocks.
Performance Snapshot:
- 1-Year Return: -12.81%
Who Can Invest:
- Long-term small-cap investors
Risk Factors:
- Liquidity risk
- High volatility
10. Motilal Oswal Midcap Fund
Fund Objective: Focuses on high-growth mid-cap companies.
Performance Snapshot:
- 1-Year Return: -12.51%
- 3-Year CAGR: 25.87%
- 5-Year CAGR: 28.78%
- 10-Year CAGR: 18.44%
Who Can Invest:
- Long-term investors with patience
Risk Factors:
- Mid-cap volatility
This is one of the favorite mutual fund Recommended by ChatGPT to invest in 2026 apart from Grok and Perplexity, however the underperformance in the last 1 year is worrying.
11. Samco ELSS Tax Saver Fund
Fund Objective: ELSS fund aiming for long-term capital appreciation with tax benefits.
Performance Snapshot:
- 1-Year Return: -12.49%
- 3-Year CAGR: 9.30%
Who Can Invest:
- Tax-saving investors under Section 80C
Risk Factors:
- Lock-in period
- Market volatility
12. DSP Nifty Smallcap250 Quality 50 Index Fund
Fund Objective: Tracks quality-focused small-cap stocks.
Performance Snapshot:
- 1-Year Return: -12.41%
Who Can Invest:
- Long-term investors seeking factor-based exposure
Risk Factors:
- Small-cap risks
13. LIC MF Small Cap Fund
Fund Objective: Invests in emerging small-cap companies.
Performance Snapshot:
- 1-Year Return: -12.17%
- 3-Year CAGR: 18.30%
- 5-Year CAGR: 23.30%
Who Can Invest:
- Aggressive long-term investors
Risk Factors:
- Liquidity and volatility risk
There are better funds as indicated in our 5 Best Smallcap Mutual Funds to Invest in 2025 (Based on Rolling Returns).
14. Tata Small Cap Fund
Fund Objective: Long-term wealth creation through small-cap investments.
Performance Snapshot:
- 1-Year Return: -11.97%
- 3-Year CAGR: 16.47%
- 5-Year CAGR: 24.84%
Who Can Invest:
- Investors with 7+ year horizon
Risk Factors:
- Market corrections impact
15. Bandhan Nifty IT Index Fund
Fund Objective: Tracks the Nifty IT Index.
Performance Snapshot:
- 1-Year Return: -11.83%
Who Can Invest:
- Passive investors betting on IT recovery
Risk Factors:
- Sector concentration
16. Axis Nifty IT Index Fund
Performance Snapshot:
- 1-Year Return: -11.79%
Risk Factors:
- Global tech spending slowdown
17. Nippon India Nifty IT Index Fund
Performance Snapshot:
- 1-Year Return: -11.73%
Risk Factors:
- Currency and demand risks
18. ICICI Prudential Nifty IT Index Fund
Performance Snapshot:
- 1-Year Return: -11.71%
- 3-Year CAGR: 11.68%
Risk Factors:
- Sector-specific volatility
19. Navi Nifty IT Index Fund
Performance Snapshot:
- 1-Year Return: -11.70%
Risk Factors:
- Narrow sector exposure
20. Bandhan Nifty Alpha 50 Index Fund
Fund Objective: Tracks high alpha stocks from the Nifty 50 universe.
Performance Snapshot:
- 1-Year Return: -11.37%
Who Can Invest:
- Factor-investing enthusiasts
Risk Factors:
- Factor underperformance during corrections
Conclusion: Should You Worry About These Funds?
Short-term underperformance does not automatically make a mutual fund bad. Many of the schemes listed above belong to sectoral, thematic, or factor-based categories that go through sharp cycles. Investors should avoid knee-jerk reactions, review asset allocation, and align investments with long-term goals. Diversification and periodic review remain key to successful investing.
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