Mid-cap investing - Invest Gloo

Investing in mutual funds is one of the most popular ways for people to grow their wealth over time. While many mutual funds deliver steady returns, some significantly underperform over time. Whether you're a beginner or experienced investor, understanding about the underperforming funds is just as important as spotting winners. In this article, we will highlight the 10 Worst Performing Mutual Funds in India last 10 years. It aims to help investors understand which funds didn’t live up to expectation, why they performed poorly, and what you can learn from them. Why Do Some Mutual Funds Perform Poorly? Before we look at the 10 worst performing mutual funds in the last 10 years, let’s first understand why some mutual funds don’t give good returns: Poor Fund Management – If the fund manager makes bad investment decisions, the mutual fund may not perform well. High Expense Ratios – If the fund charges high fees, your actual returns will be lower. Wrong Sector Exposure – If the fund invests in sectors that are not doing well over the period, then it can hurt your overall performance. Market Volatility – If the fund is too exposed to markets that go up and down a lot, it may lose more during tough times. Lack of Diversification – If the fund invests in too few stocks or sectors, it becomes riskier and more affected by market changes. 10 Worst Performing Mutual Funds in India Last 10 Years 1. HSBC Infrastructure Equity Fund Returns – Over 10 years, the average annual return is around 2.1% per year. What went wrong – The fund invested a lot in the infrastructure sector, which went through slow growth and government-related issues. Lesson – Don’t invest in sector-specific funds unless you truly believe in that sector’s long-term future. 2. LIC MF Infrastructure Fund Returns – Over 10 years, the average annual return is around 1.8% per year. What went wrong – Like HSBC fund, this one also focused on the infrastructure sector and often chose the wrong stocks. Lesson – Sector funds can sometimes give high returns if the sector does well but they also come with high risks. 3. Franklin India Opportunities Fund Returns – Over 10 years, the average annual return is around 3.5% per year. What went wrong – This fund invested a lot in mid-cap and small-cap stocks, which are smaller companies. These companies can give high returns in a growing market, but they also carry more risk. Lesson – Don’t put all your money into just one type of stock. Diversification is important and it helps in reducing risks. 4. Sahara Growth Fund Returns – Over 10 years, the average annual return is around 1.0% per year. What went wrong – Not enough transparency, weak fund management, and low trust from investors over the years because investors didn’t get clear updates or confidence in how their money was being handled. Lesson – Always invest in SEBI-registered, well-known AMCs that follow strong rules and give regular and clear updates. 5. JM Basic Fund Returns – Over 10 years, the average annual return is around 2.3% per year. What went wrong – Poor stock selection and failure to keep up with changing market funds. The fund stuck in outdated ideas and didn’t react in time. Lesson – Funds that don’t keep up with market changes often perform poorly and can disappoint investors over time. 6. Taurus Discovery (Midcap) Fund Returns – Over 10 years, the average annual return is around 3.1% per year. What went wrong – It had too much volatility and poor performance in mid-cap stocks and the fund struggled to manage risks in this category. Lesson – Mid-cap investing is not easy, it needs skilled fund managers and investors patience to handle the ups and downs of the market. 7. Reliance Close Ended Equity Fund – Series A Returns – Over 10 years, the average annual return is around 2.8% per year. What went wrong – It mainly lacked the Close-ended funds flexibility which makes it hard to adjust the portfolio during changing market conditions. Lessons – Open-ended funds allow more freedom to make changes, which can lead to better performance over time. 8. UTI Banking Sector Fund Returns – Over 10 years, the average annual return is around 3.2% per year. What went wrong – It mainly focused on underperforming banking sector stocks, especially when the sector faced tough times. Lesson – Sector funds carry high risks, just because banking stocks worked once doesn’t mean they will always be safe and profitable investment options. 9. Sundaram Select Micro Cap Series Returns – Over 10 years, the average annual return is around 2.5% per year. What went wrong – Many micro-cap stocks were too small and unstable, which leads to high volatility and difficulty in buying and selling stocks. Lesson – Micro-cap funds can sometimes deliver quick gains, but the risk of losses is also much higher due to market ups and downs. 10. BOI AXA Manufacturing & Infrastructure Fund Returns – Over 10 years, the average annual return is around 2.0% per year. What went wrong – This manufacturing sector didn’t grow as planned, and the fund had a hard time choosing good companies to invest in. Lesson – Even if a sector looks good for the long term, that doesn’t guarantee that a mutual fund in that sector will perform well. Common Features Among Poor Performers High Expense Ratios: Many of these funds charge over 2.5% which reduces your profits. Low AUM (Asset Under Management): Funds with low AUM can have fewer buyers and sellers, making them riskier and more volatile. Inactive Fund Management: When fund managers are not active or make wrong decisions, then it can hurt the overall performance very quickly. Neglect of Market Trends: Ignoring big economic changes can lead to poor results very quickly. How to Avoid Investing in Poor Mutual Funds? Here are some mutual fund investing tips to stay away from poor performers: Check Past Returns: Look at how the fund has performed in the last 3-years, 5-years, and 10-years returns. Review Fund Manager’s Track Record: A good fund manager with experience usually gives better returns. Compare with Benchmark: If a fund often gives lower returns than its benchmark, it is a warning sign that it may not be managed well. Look at Expense Ratios: Choose funds with lower expense ratios to keep more of your returns. Read Fund Reviews: Check expert opinion and what other investors are saying so that you can make a better and more informed decision. Diversify: Don’t just invest all your money in one type of fund like sector or thematic funds. Spread it out, so that if one doesn’t do well, others can still give you good returns. Conclusion Mutual funds can be a smart way to invest for the long term, but not all mutual funds perform the same. The worst performing mutual funds in the last 10 years show us why it is important to choose carefully, understand sectoral risks, and know the value of active management. As an investor, you should stay updated, do proper research, and always keep your finance goals in mind. Before you invest, talk to a SEBI-registered financial advisor and check the latest fund performance reports. FAQs What should I do if I’m already invested in a poor-performing mutual fund? Check how the mutual fund is doing compared to its benchmark and other similar funds. If it has performed poorly for more than 2-3 years, you may want to switch to a better performing fund. Are sector-specific funds riskier than diversified funds? Yes. sector-specific funds focus only on one industry. If that sector performs poorly, your fund can lose a lot of value. Diversified funds spread the risk across different sectors, so they are usually safer. Do high expense ratios affect mutual fund returns? Yes, they do. High expense ratios eat into your profits. Over time, this can lead to lower returns compared to mutual funds with lower costs. How can I track mutual fund performance? You can check mutual fund performance on websites like Moneycontrol, Value Research, or Morningstar. You can also use your mutual fund app or platform to see how your funds are doing. Are low returns in the past always a sign of bad funds? Not always. Sometimes, mutual funds give low returns for a short time because of market ups and downs. But if the fund keeps underperforming for 5-10 years, it’s usually a bad sign.