10 Worst Performing Mutual Funds within the Final 5 Years (1.7% to 9.1% CAGR Returns)

The Indian inventory market has taken good correction within the final 6 months and began recovering in the previous couple of days. Nifty50 has generated over 150% returns within the final 5 years (20-Apr-2020 to 19-April-2025) which seems to be 20% CAGR returns. Nevertheless there are a number of mutual funds that generated under 9% CAGR returns in final 5 years. You may be questioning when Nifty has such good returns up to now 5 years and majority of the lively funds generated double digit annualised returns, how come there are mutual funds producing such low returns. Let’s get into extra particulars about such funds. On this article, we are going to talk about the 10 Worst Performing Mutual Funds within the Final 5 Years (20-April-2020 to 19-April-2025).

How We Recognized These Worst Performing Mutual Funds?

Earlier we wrote about Worst Performing Mutual Funds in final 3 years and we’re persevering with this collection.

• We thought of all fairness mutual funds, together with sectoral and thematic funds and international funds.
• We excluded ETFs from this checklist.
• We filtered the underside 10 funds primarily based on their 5-year returns.
• These 10 funds generated 1.7% to 9.1% annualised returns within the Final 5 Years.

Record of 10 Worst Performing Mutual Funds within the Final 5 Years

Listed here are the ten worst-performing mutual funds primarily based on their 5-year annualised returns:

Deep Dive into These Worst Performing Mutual Funds

Let’s discover these funds intimately, their aims, efficiency, and our view.

#1 – Edelweiss Better China Fairness Off-shore Fund – 5-Yr CAGR Return: 1.7%

Funding Goal: The scheme goals to supply long-term capital appreciation by investing in corporations within the Better China area.

Annualised Returns:

• 1 Yr: 11.5%
• 3 Yr: -2.1%
• 5 Yr: 1.7%
• 10 Yr: 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 decrease risk-adjusted returns.

Our View: The Edelweiss Better China Fairness Off-shore Fund has seen modest long-term efficiency, with a 5-year CAGR of simply 1.7%. Whereas there was a current uptick in 1-year returns, the fund continues to mirror the broader underperformance of the Chinese language fairness markets. Although some FIIs are shifting focus again to China, the long-term outlook stays unsure on account of geopolitical tensions and financial headwinds. Traders ought to stay cautious and keep away from overexposure. As an alternative, they’ll think about allocating a small portion of their portfolio to international funds—ideally these with a constant observe document throughout areas. Diversification is vital, and there are a number of top-performing worldwide mutual funds price contemplating in 2025.

#2 – HSBC Brazil Fund – 5-Yr CAGR Return: 3.5%

Funding Goal: To supply long-term capital development by investing in Brazil-focused equities.

Annualised Returns:

• 1 Yr: -6.3%
• 3 Yr: -3.9%
• 5 Yr: 3.5%
• 10 Yr: 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 efficiency.

Our View: The HSBC Brazil Fund has delivered lacklustre long-term efficiency, with a 10-year return of simply 0.4%, and up to date returns additionally stay in unfavorable territory. Regardless of Brazil’s potential as an rising market, poor risk-adjusted efficiency make this fund a high-risk choice. Given the continuing macroeconomic and political challenges in Brazil, traders could also be higher off avoiding such underperforming areas. As at all times, it’s smart to stay to a disciplined asset allocation technique and think about allocating solely a small portion of the portfolio to worldwide funds with a constant observe document.

Above fund is a part of Worst Performing Mutual Funds in final 1 12 months article too.

#3 – PGIM India Rising Markets Fairness Fund – 5-Yr CAGR Return: 4.2%

Funding Goal: This fund focuses on alternatives in rising market equities excluding India.

Annualised Returns:

• 1 Yr: 10.4%
• 3 Yr: 2.7%
• 5 Yr: 4.2%
• 10 Yr: 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 danger adjusted returns.

Our View: Whereas the PGIM India Rising Markets Fairness Fund goals to faucet into development throughout rising markets (excluding India), its long-term efficiency has been comparatively low. With a 10-year CAGR of simply 2.6% and a 5-year CAGR of 4.2%, the returns haven’t lived as much as expectations. Regardless of a comparatively low Beta indicating decrease volatility, the unfavorable Alpha suggests subpar risk-adjusted returns. As highlighted earlier, traders ought to be cautious about allocating important parts to underperforming or inconsistent worldwide markets. A greater method is to keep up a well-diversified portfolio and think about international funds with sturdy and secure efficiency.

#4 – Edelweiss Rising Markets Alternatives Fairness Offshore Fund – 5-Yr CAGR Return: 4.7%

Funding Goal: Invests in JPMorgan Funds – Rising Markets Alternatives Fund for long-term capital appreciation.

Annualised Returns:

• 1 Yr: 3.8%
• 3 Yr: 1.7%
• 5 Yr: 4.7%
• 10 Yr: 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 efficiency relative to danger.

Our View: This fund’s efficiency has remained under par, regardless of its publicity to various rising markets. The mix of a comparatively excessive expense ratio and weak Alpha signifies that the fund has not generated sufficient risk-adjusted returns to justify its value. Traders trying to diversify internationally ought to think about various international funds with stronger historic efficiency and extra constant Alpha.

#5 – Franklin Asian Fairness Fund – 5-Yr CAGR Return: 5.4%

Funding Goal: Invests in corporations throughout Asia (excluding Japan) for capital appreciation.

Annualised Returns:

• 1 Yr: 8.08%
• 3 Yr: 2.0%
• 5 Yr: 5.4%
• 10 Yr: 5.3% (₹ 1 Lakh would have turned to 1.68 Lakhs)

Expense Ratio: 1.59% (Direct plan)

Beta: 0.61 indicating decrease volatility.

Alpha: -6.71 indicating poor returns for the chance taken.

Our View: The Franklin Asian Fairness Fund offers publicity to Asian markets (excluding Japan), however its long-term efficiency has been pretty common. Regardless of first rate 1-year returns, the 5-year and 10-year CAGRs stay modest at 5.4% and 5.3% respectively. A Beta of 0.61 suggests decrease volatility, however the considerably unfavorable Alpha (-6.71) signifies poor compensation for the chance taken. Given the inconsistent efficiency of many Asian markets and the fund’s lack of ability to generate sturdy risk-adjusted returns, traders ought to might evaluation and spend money on acceptable funds. Traders can have a look at 20 Fairness Funds that has low Beta with Excessive Alpha for funding.

#6 – HSBC International Rising Markets Fund – 5-Yr CAGR Return: 7.1%

Funding Goal: Invests in rising markets globally to generate long-term returns.

Annualised Returns:

• 1 Yr: 8.2%
• 3 Yr: 1.2%
• 5 Yr: 7.1%
• 10 Yr: 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 danger adjusted returns.

Our View: Whereas this fund has carried out higher than others on this checklist, it nonetheless lags behind many home and international friends. The unfavorable Alpha suggests the returns haven’t been passable when adjusted for danger. Rising markets will be risky, and this fund’s efficiency displays that inconsistency. Traders ought to consider whether or not this matches inside their broader portfolio technique.

#7 – Franklin India Feeder – Templeton European Alternatives Fund – 5-Yr CAGR Return: 7.7%

Funding Goal: Invests in Franklin European Progress Fund specializing in European equities.

Annualised Returns:

• 1 Yr: 4.6%
• 3 Yr: 4.3%
• 5 Yr: 7.7%
• 10 Yr: 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 publicity has not translated into sturdy returns traditionally. A comparatively excessive expense ratio and marginally unfavorable Alpha cut back its attraction. Whereas Europe has proven indicators of restoration in sure sectors, traders might need to think about diversified international funds or developed market funds with higher consistency and decrease prices. In any other case they’ll persist with Indian inventory market and spend money on Diversified Mutual Funds Portfolio checklist in 2025.

#8 – Kotak International Rising Market Fund – 5-Yr CAGR Return: 8.2%

Funding Goal: To supply long-term capital development by investing in rising markets throughout the globe.

Annualised Returns:

• 1 Yr: 3.2%
• 3 Yr: 2.6%
• 5 Yr: 8.2%
• 10 Yr: 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 proven comparatively higher efficiency amongst its friends, with an 8.2% CAGR over 5 years. Nevertheless, its 10-year return of 4.2% stays low, reflecting the general volatility and unpredictability of rising markets. Traders on the lookout for worldwide publicity ought to concentrate on funds with a robust long-term observe document throughout market cycles.

#9 – HSBC Asia Pacific (Ex Japan) Dividend Yield Fund – 5-Yr CAGR Return: 8.8%

Funding Goal: Invests in excessive dividend-yielding corporations within the Asia-Pacific area excluding Japan.

Annualised Returns:

• 1 Yr: 10.4%
• 3 Yr: 3.7%
• 5 Yr: 8.8%
• 10 Yr: 7.1% (₹ 1 Lakh would have turned to 1.98 Lakhs)

Expense Ratio: 0.9% (Direct plan)

Beta: 0.4 indicating decrease danger.

Alpha: -3.52 suggesting poor risk-adjusted returns.

Our View: This fund stands out with one of many higher long-term performances amongst any of the above worldwide funds, delivering a stable 10-year CAGR of seven.1%. Its concentrate on excessive dividend-yielding corporations has helped generate comparatively secure returns, with a good 5-year CAGR of 8.8%. The fund additionally exhibits decrease danger (Beta of 0.4), although the unfavorable Alpha (-3.52) signifies it hasn’t delivered sturdy returns relative to the chance taken. Whereas not with out drawbacks, this fund may go well with traders looking for publicity to income-generating equities within the Asia-Pacific area.

#10 – ICICI Prudential International Benefit Fund (FOF) – Direct Plan – 5-Yr CAGR Return: 9.1%

Funding Goal: Invests in worldwide funds specializing in international alternatives for long-term development.

Annualised Returns:

• 1 Yr: 15.1%
• 3 Yr: 7.3%
• 5 Yr: 9.1%
• 10 Yr: NA

Expense Ratio: 0.59% (Direct plan)

Beta: 0.29 indicating reasonable volatility.

Alpha: -0.09 indicating poor risk-adjusted efficiency.

Our View: The fund has delivered sturdy brief to medium-term returns, with a stable 5-year CAGR of 9.1% and spectacular 1-year and 3-year efficiency. With a low expense ratio of 0.59% and reasonable volatility (Beta of 0.29), it provides environment friendly international publicity. Nevertheless, the near-zero Alpha (-0.09) suggests the returns haven’t considerably outpaced the chance taken. Regardless of this, the fund stands out for its consistency and broad international diversification. For traders trying to allocate a portion of their portfolio to worldwide markets, this fund might be a promising choice in 2025.

Ultimate Ideas

You may be questioning what to do in case you have invested in any of those funds. First evaluation whether or not such funds align to your monetary objectives, danger urge for food and tenure of funding. Then verify for brief to medium to long run efficiency together with inventory market efficiency underneath which these funds are investing and take a call whether or not to proceed or exit.

Suresh KP is a seasoned monetary professional with over 20 years of expertise. He’s NISM Licensed Funding Adviser and Analysis Analyst. For extra about his experience and certifications, go to About Suresh KP

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