20 Worst Performing Mutual Funds in the Last 1 Year: A Comprehensive Analysis

While most investors are keen to discuss top-performing mutual funds, analyzing poor performers is equally crucial. The last one year has been particularly tough for several equity segments, especially sectoral themes like real estate, IT, momentum strategies, and select small- and mid-cap funds. Sharp corrections, profit booking, global uncertainties, and valuation resets have significantly impacted returns for many schemes. In this article, we analyze 20 of the worst-performing mutual funds in the last 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 funds - Analyzed 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, so 3-year, 5-year, or 10-year performance data is not available for 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

Conclusion: Should You Worry About These Funds? Understanding the reasons behind the underperformance of these mutual funds can help investors make more informed decisions. While it is crucial to review and adjust your portfolio, it is equally important to avoid making hasty decisions based on short-term performance. Long-term investment strategies often require patience and a broader perspective on market cycles and economic trends.