10 Worst Performing Mutual Funds in 10 years (2013 to 2023)

If you are investing in mutual funds for the medium to long term, you might be analyzing the best-performing funds to invest in. On the contrary no one is interested in worst performing mutual funds. What if that you have invested in a fund which turned to be one of the worst performing mutual funds? In this article we would analyse Ten Worst Performing Mutual Funds in last 10 years between 2013 to 2023 and some interesting facts about them.

Also Read: 10 Largecap Funds with highest returns in last 5 years

How did we filter these Worst Performing Mutual Funds between 2013 to 2023?

We applied a simple filter based on the following criteria:

  • Considered all equity mutual funds, excluding sector funds. The rationale for excluding sector mutual funds is that some sectors are cyclical in nature, and financial advisors generally recommend fewer sector funds to investors as well.
  • Excluded exchange-traded funds (ETFs).
  • It is evident that this filter was used for funds that existed for over 10 years.
  • The returns are for the direct plan of mutual funds.

10 Worst Performing Mutual Funds in 10 years (2013 to 2023)

10 Worst Performing Mutual Funds in 10 years (2013 to 2023)

Here are the Top 10 Worst Performing equity Funds from the last 10 years. We have also provided their 3-years, 5-years and 10-years annualised returns for reference.

Funds 3 Yr Ret (%) 5 Yr Ret (%) 10 Yr Ret (%)
Taurus Flexi Cap Fund 17.67 12.15 11.74
Taurus Largecap Equity Fund 15.29 12.32 12
Sundaram Nifty 100 Equal Weight Fund 19.93 15.62 12.53
LIC MF S&P BSE Sensex Index Plan 16.16 15.19 13.25
Aditya Birla Sun Life Nifty 50 Index Fund 17.03 15.16 13.26
DSP Top 100 Equity Fund 16.92 14.37 13.26
Franklin India NSE Nifty 50 Index 16.93 15.05 13.43
LIC MF Nifty 50 Index Plan 16.89 15.23 13.45
Nippon India Index Fund – S&P BSE Sensex Plan 16.39 15.42 13.53
SBI Nifty Index Fund 17.17 15.26 13.56

Interesting Facts about these Worst Performing Funds

#1 – Worst Performing Funds still generated over 12% returns in long run

  • While the returns from all equity funds ranged between 11.7% to 30%, the 10 worst performing funds returns ranged between 11.7% to 13.5% annualised returns in the last 10 years.
  • Except for 1 fund all other worst performing funds still generated over 12% returns in long term.
  • One would argue that stock markets are at peak now, hence such returns could be higher which could be true.
  • But such bull runs are expected in medium to long term anyways.

What did we learn: Don’t worry too much about chasing a particular fund. One should continue to invest for long term. Even if your fund is worst performing you can still aim and generate over 12% annualised returns in long term.

#2 – Investing heavily in one AMC can reduce your overall returns

  • There are 2 AMC’s (LIC MF and Taurus MF) which has 2 funds each in the worst performing list.
  • Earlier, we discussed about Worst Performing Axis Mutual Funds.
  • Even many investors suffered due to Franklin debt funds fiasco.
  • Too much exposure to particular AMC funds may have negative impact on your portfolio in long term compared to their peer funds.

What did we learn: Like I said earlier several times, don’t invest heavily in mutual funds from one AMC. Investors should diversify across AMCs too. The under performance of funds under an AMC should not effect returns from mutual fund portfolio.

#3 – Invest in low cost Sensex Index Funds / Nifty 50 index funds

Considering the entire universe of Sensex Index Funds (that invests in BSE 30 stocks), the returns in the last 10 years are ranging between 13.2% to 13.8%.

This list of worst performing funds has 2 Sensex Funds where returns are at 13.2% and 13.5%. There could be tracking error and expense ratio variance among these Sensex Funds hence there is some variance in the returns.

Similarly even Nifty 50 index funds have some variance among all the funds.

What did we learn: While investors need not chase good index funds as they more or less invests in same stocks in the indelying index, consider index funds that has low expense ratio beyond tracking error.

#4 – Though Index Funds generate low returns, these are still good

  • If you observe, out of 10 worst funds, 7 funds are from sensex / nifty index fund categories.
  • Index funds replicate the returns of the particular index excluding tracking error and expense ratio.
  • Outside of this 10 worst performing funds, the entire category of sensex index funds or nifty 50 index funds generated between 13% to 13.8% returns.

What did we learn: Investors who are not comfortable in investing in active funds, can go for index funds which are sure shot way of making money in long term. Even such investors could have generated over 12% returns in the long term even if they have invested in such worst mutual funds.

You may like: Best Balanced Advantage Funds for 2024

#5 – Short Term Performance cannot be counted

These funds have been among the worst performers in the last 10 years across the entire universe of equity funds. However they have still delivered impressive performance of 15% to 17% annualised returns in last 3 years and 12% to 14.5% annualised returns in last 5 years due to bull market.

What did we learn:  Don’t go with short term performance. The performance is majorly due to stock markets reaching peak in the last few months.

Final Conclusion on Worst Performing Funds

  • Do not time the market. Continue to invest for medium to long term.
  • If you are not comfortable with active funds, go with index funds where one can still make over 12% returns.
  • Avoid too much exposure to a particular AMC.
  • Even if you invested in worst-performing funds, you could still aim to generate 12% annualised returns in the long term, though it’s not guaranteed.
Suresh KP

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