Which are the high-risk and underperforming mutual funds that can be avoided by investors?

This article categorizes mutual funds based on relative performance, highlighting those offering lower returns at higher risk which can be potentially avoided by investors.

Which are the high-risk and underperforming mutual funds that can be avoided by investors?


Posted on 22 Jan 2025 • Updated on: 22 Feb 2025
Author: Sayan Sircar
Tags: Tags Screener ;  Mutual Funds
12 mins read
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This article categorizes mutual funds based on relative performance, highlighting those offering lower returns at higher risk which can be potentially avoided by investors.

Which are the high-risk and underperforming mutual funds that can be avoided by investors?

Disclaimer: The Fund names in this article are not recommendations to buy/hold/sell. Mutual funds are subject to market risks. Do not invest real money without adequate research.

If you are unhappy with the performance of your mutual funds, you can get a free Mutual Fund Portfolio review.

This article is a part of our detailed article series on the worst performing mutual funds in India. Ensure you have read the other parts here:

📚 Table of Contents

The most basic and simplest equity mutual fund investment that an investor can make is a Nifty 50 Index fund.

Since a diversified index like the Nifty 50 is a decent representative of the stock market, since Nifty 500 and Nifty Total Market funds are quite new, and index funds tracking the Nifty 50 are quite common and popular, it makes a lot of sense to choose active funds that at least attempt to give better returns than the humble Nifty 50 index fund.

By better returns here, we mean, vs. the Nifty 50 index fund,

  • higher returns
  • lower risk (measured via volatility)
  • or both

Funds that don’t give either better returns or have higher volatility than index funds should be carefully reviewed to understand the reason for underperformance.

What is the concept of relative risk vs. return performance of mutual funds against the market benchmark?

Excess Risk and Return of Funds vs the Nifty 50 TRI

If we split the list of all equity mutual funds then we will end up with four categories:

  • funds that give better returns than the Nifty 50 index fund but with lower risk which are ideal for any investor
  • funds that give better returns than the Nifty 50 index fund but with higher risk which are great for investors with high risk tolerance
  • funds that give lower returns than the Nifty 50 index fund but with lower risk which are good for debt funds
  • funds that give lower returns than the Nifty 50 index fund but with higher risk which is a terrible place to be for an equity fund

Related:
Top Mutual Funds with High Returns & Low Risk for Bottom Fishing

Users of the free Arthgyaan mutual fund portfolio review service will get the above chart created for all funds in their portfolio.

In this article, we will look at the latest list of equity mutual funds, including index funds tracking indices other than the Nifty 50, to check if they are in the worst category of lower returns and higher risk.

In the analysis below, we have chosen equity and hybrid mutual funds with worse returns at higher risk using the last three years of market data from AMFI for the period ending 21-Feb-2025. The funds that have fallen the most from their 52-week high levels are presented first.

Which mutual funds have lower returns at higher risk vs the broad market?

Note: This chart represents point-to-point data. The funds in the list will change over time as the future performance of any particular fund is random and cannot be predicted in advance.

Other: FoF Domestic

Fund Change (%) NAV (52w high) Latest NAV
Axis Equity ETFs FOF 18.14 17.0468 13.9545
ICICI Prudential Nifty 100 Low Volatility 30 ETF FOF 14.20 19.8080 16.9955
Quantum Equity 13.78 88.0250 75.8960
ICICI Prudential Passive Strategy 12.14 174.6396 153.4393
ICICI Prudential India Equity FOF 11.26 32.6487 28.9738
HSBC Managed Solutions 11.17 43.2582 38.4266
Aditya Birla Sun Life Financial ning 10.19 59.1235 53.1007

Equity: Large Cap

Fund Change (%) NAV (52w high) Latest NAV
BARODA BNP PARIBAS LARGE CAP 15.18 271.7361 230.4836
PGIM India Large Cap 14.10 421.4400 362.0100
Aditya Birla Sun Life Frontline Equity 13.95 605.4800 521.0400
HDFC Large Cap 13.61 1309.4330 1131.1730
SBI BLUE CHIP 12.78 105.7929 92.2747
Franklin India Bluechip 12.65 1180.3815 1031.0055
ICICI Prudential Bluechip 12.45 124.6000 109.0900
Sundaram Large Cap 12.08 24.0070 21.1076
CANARA ROBECO BLUE CHIP EQUITY 12.07 74.7000 65.6800
DSP Top 100 Equity 10.61 527.6690 471.6760

Hybrid: Aggressive

Fund Change (%) NAV (52w high) Latest NAV
JM Aggressive Hybrid 13.69 147.1653 127.0246
Groww Aggressive Hybrid 12.07 23.9893 21.0932
Invesco India Aggressive Hybrid 11.67 25.7796 22.7723
Tata Hybrid Equity 11.64 508.3327 449.1459
Kotak Equity Hybrid 11.17 73.5960 65.3780
Sundaram Aggressive Hybrid 10.85 188.8582 168.3698
BANDHAN Hybrid Equity 10.83 28.9280 25.7940
Mirae Asset Aggressive Hybrid 10.67 37.6590 33.6420
Nippon India Equity Hybrid 10.61 119.5680 106.8873
CANARA ROBECO EQUITY HYBRID 10.41 410.3800 367.6500
Baroda BNP Paribas Aggressive Hybrid 10.12 32.4918 29.2035
Mahindra Manulife Aggressive Hybrid 10.00 30.2236 27.2007

Other: Index Funds

Fund Change (%) NAV (52w high) Latest NAV
Edelweiss Nifty 100 Quality 30 Index 16.97 16.2351 13.4805
UTI BSE Low Volatility Index 15.30 18.2369 15.4463
BANDHAN Nifty 50 Index 12.79 57.5856 50.2182
Navi Nifty 50 Index 12.76 16.9663 14.8019
Axis Nifty 50 Index 12.70 15.6240 13.6396

Equity: Dividend Yield

Fund Change (%) NAV (52w high) Latest NAV
Sundaram Dividend Yield 15.87 159.7432 134.3879
ICICI Prudential Dividend Yield Equity 12.85 60.3900 52.6300
Templeton India Equity Income 12.53 164.5244 143.9081

Equity: ELSS

Fund Change (%) NAV (52w high) Latest NAV
ICICI Prudential ELSS Tax Saver 14.55 1080.4400 923.2900
Sundaram ELSS Tax Saver 12.86 561.4681 489.2832
PGIM India ELSS Tax Saver 12.35 40.8900 35.8400
HDFC ELSS Tax saver 11.65 1541.7930 1362.2350

Solution: Retirement Fund

Fund Change (%) NAV (52w high) Latest NAV
SBI Retirement Benefit 14.82 22.4838 19.1512
HDFC Retirement Savings 13.08 59.5610 51.7700
Axis Retirement 12.75 22.4400 19.5800
SBI Retirement Benefit 11.86 20.4911 18.0610
Tata Retirement Savings 11.62 78.1158 69.0405
Axis Retirement 11.51 20.7700 18.3800
ICICI Prudential Retirement 10.97 28.1600 25.0700

Equity: Focused

Fund Change (%) NAV (52w high) Latest NAV
Aditya Birla Sun Life Focused 13.62 165.8028 143.2232

Equity: Flexi Cap

Fund Change (%) NAV (52w high) Latest NAV
SBI Flexicap 12.40 127.9316 112.0637

Equity: Large Mid Cap

Fund Change (%) NAV (52w high) Latest NAV
ICICI Prudential Large Mid Cap 11.75 1136.2200 1002.6600
SBI LARGE MIDCAP 11.25 679.1047 602.7178

Equity: Sectoral or Thematic

Fund Change (%) NAV (52w high) Latest NAV
ICICI Prudential FMCG 18.52 606.7700 494.4200
UTI MNC 18.35 476.5359 389.1151
ICICI Prudential Bharat Consumption 17.20 29.7100 24.6000
SBI Equity Minimum Variance 17.12 27.2354 22.5733
ICICI Prudential MNC 14.75 33.0200 28.1500
ICICI Prudential ESG Exclusionary Strategy 13.38 24.8200 21.5000
ICICI Prudential Exports Services 11.79 183.0800 161.5000
ICICI Prudential Quant 11.35 24.1500 21.4100
ICICI Prudential Business Cycle 11.29 25.5100 22.6300
SBI HEALTHCARE OPPORTUNITIES 10.35 504.8606 452.5945

Equity: Contra

Fund Change (%) NAV (52w high) Latest NAV
SBI CONTRA 12.69 440.4668 384.5877

Equity: Value

Fund Change (%) NAV (52w high) Latest NAV
ICICI Prudential Value Discovery 10.81 524.2800 467.6300

Hybrid: Dynamic Asset Allocation Or Balanced Advantage

Fund Change (%) NAV (52w high) Latest NAV
NJ Balanced Advantage 11.78 15.1900 13.4000
BANK OF INDIA BALANCED ADVANTAGE 10.65 27.6528 24.7065

Solution: Child Fund

Fund Change (%) NAV (52w high) Latest NAV
SBI Magnum Childrens Benefit 12.95 46.3549 40.3520

Equity: Multi Cap

Fund Change (%) NAV (52w high) Latest NAV
SBI Multicap 12.20 17.7229 15.5603

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Also read
A complete history of gold prices in India since the 1950s

What should investors do with this data?

Related:
Analyze Your Mutual Fund Portfolio for Free with Arthgyaan's Mutual Fund Review Service

There are three key takeaways from this data:

  1. Review existing funds: Investors should check if their current funds are on the list and evaluate their next steps, including consulting their advisor.
  2. Bottom fishing opportunities: Funds in the list might represent bottom-fishing opportunities if you can make a case that the underperformance is a buying opportunity for a lump sum investment.
  3. Exit active funds in the portfolio: This might be a good opportunity to move off to index funds to avoid future underperformance

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This post titled Which are the high-risk and underperforming mutual funds that can be avoided by investors? first appeared on 22 Jan 2025 at https://arthgyaan.com


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