12 Worst Performing Mutual Funds in last 3 years (-13.3% to -0.1% Annualised Returns)

Nifty touched 23,000 this week and took some break with small correction. Many mutual fund schemes are outperforming the benchmarks. However, there are some funds which are lagging behind and many investors who have invested in them might not be even aware of it. These are calmly erasing the wealth of those investors. In this article we would talk about 12 Worst Performing Mutual Funds in the last 3 years (1-Jun-2021 to 31-May-2024) that have generated negative or low returns, along with our view about such funds. This would help investors not to get into any trap and screw up their investments.

How did we filter the worst performing funds over the last 3 years?
We considered all equity mutual funds, including sector funds, thematic mutual funds and global funds, but we excluded ETFs for this analysis.
Since we focused on the past 3 years’ performance, any fund launched in less than 3 years is not included in this list. We got list of 416 equity mutual funds after filtering this.

To identify the worst performing funds, we sorted the funds based on their returns over the last 3 years. There are 12 mutual fund schemes that generated negative returns in the last 3 years.  Earlier we wrote article about 10 Worst Performing Mutual Funds in the last 10 years and we could see some funds being repeated even in this list
These 12 mutual funds generated annualized returns ranging from -13% to -0.1%. You might be wondering when stock markets reached a peak, we should see mutual funds doubling or tripling in short to medium term, in contrary these are posting negative returns. Means these funds are hiding behind and erasing the wealth of the investors.

Let’s get into more details about such funds.
List of Top 12 Worst Performing Mutual Funds in the Last 3 years
Here are the top 12 worst mutual funds that generated annualized returns ranging from -13% to -0.1% over the last 3 years:
#1 – Edelweiss Greater China Equity Off-shore Fund – Minus 13.3%
#2 – Invesco India – Invesco Global Consumer Trends FoF – Minus 10.5%
#3 – DSP World Agriculture Fund – Minus 8.9%
#4 – Axis Greater China Equity FoF – Minus 8.4%
#5 – PGIM India Emerging Markets Equity Fund – Minus 8%
#6 – Edelweiss Emerging Markets Opportunities Equity Offshore Fund – Minus 5.2%
#7 – Franklin Asian Equity Fund – Minus 4.5%
#8 – HSBC Global Emerging Markets Fund – Minus 2.7%
#9 – HSBC Brazil Fund – Minus 2.6%
#10 – Kotak Global Emerging Market – Minus 1.6%
#11 – Kotak International REIT FOF – Minus 1.7%
#12 – DSP World Gold FoF – Minus 0.1%
12 Worst Performing Mutual Funds in the Last 3 years – Deep Dive into these funds
Now let into more details about these funds.
#1 – Edelweiss Greater China Equity Off-shore Fund – 3 Years Annualised Returns – Minus 13.3%
Investment Objective:
The primary investment objective of the Scheme is to provide long term capital appreciation by investing in JPMorgan Funds – Greater China Fund, an equity fund which invests primarily in a diversified portfolio of companies that are domiciled in, or carrying out the main part of their economic activity in, a country of Greater China region.
Performance Details
Absolute Returns of the fund (Direct Plans)

1-Year Return: 0.2%
2-Year Return: minus 3.1%
3-Year Return: minus 33.1%
5-Year Return: 47.2%
10-Year Return: 132.8.1%

Annualised Returns of the fund (Direct Plans)

1-Year Return: 0.2%
2-Year Annualised Return: minus 1.56%
3-Year Annualised Return: minus 13.3%
5-Year Annualised Return: 8.8%
10-Year Annualised Return: 8.8%

Our View:

This is a global mutual fund that invests in another fund which invests in stocks of china. Global funds are riskier as these have geo-political risks, foreign exchange conversion risk etc.,
Its underlying China fund top-10 share holdings are Tencent, Taiwan Semiconductor, Meituan Class, AIA, NetEase, Trip.com, Quantacomputer, HKEX and Realtek Semiconductor.
According to CNN report, China stock markets have lost USD 6 trillion in the last 3 years due to various problems including a record downturn in real estate, deflation, debt, a falling birthrate and shrinking workforce, as well as a shift towards ideology-driven policies that has rattled the private sector and scared away foreign firms
This fund has generated 9.3% annualized returns since inception.
This fund was part of earlier article on 10 Worst Performing Mutual Fund in the last 1 year.
China’s market have been underperforming in the last 3 years and there is no sign of revival at this point of time. If you have already invested in such mutual funds, you may hold for some more time before exiting such funds. Avoid any fresh investments and stop SIPs.

#2 – Invesco India – Invesco Global Consumer Trends FoF – 3 Years Annualised Returns – Minus 10.5%
Investment Objective:
To provide long-term capital appreciation by investing predominantly in units of Invesco Global Consumer Trends Fund, an overseas fund which invests in an international portfolio of companies predominantly engaged in the design, production or distribution of products and services related to the discretionary consumer needs of individuals.
Performance Details
Absolute Returns of the fund (Direct Plans)

1-Year Return: 13.5%
2-Year Return: 10.7%
3-Year Return: minus 28.5%

Annualised Returns of the fund (Direct Plans)

1-Year Return: 13.5%
2-Year Annualised Return: 5.2%
3-Year Annualised Return: minus 10.5%

Our View:

This is a global mutual fund that invests in another fund which invests across companies except for UK. Global funds are riskier as these have geo-political risks, foreign exchange conversion risk etc.,
Its underlying fund top-10 share holdings are Amazon, Meta, DraftKings, Uber, Microsoft, Netflix, Lowe, Mercadolibre, Tesla and Advanced Micro Devices.
This fund has generated minus 7.3% annualised return since inception.
This fund invests in companies that are upcoming with innovative products. Generally, such funds are highly volatile as we do not know whether such innovative companies would be able to perform well in the short term, however, can generate significant wealth for medium to long term. If you have already invested in such funds, continue to invest for some more time.

#3 – DSP World Agriculture Fund – 3 Years Annualised Returns – Minus – 8.9%
Investment Objective:
The primary investment objective of the scheme is to seek capital appreciation by investing predominantly in units of BlackRock Global Funds – Nutrition Fund (BGF – NF).
Performance Details
Absolute Returns of the fund (Direct Plans)

1-Year Return: minus 4.5%
2-Year Return: minus 12.8%
3-Year Return: minus 24.6%
5-Year Return: 14.8%
10-Year Return: 28.3%

Annualised Returns of the fund (Direct Plans)

1-Year Return: minus 4.5%
2-Year Return: minus 6.6%
3-Year Return: minus 8.9%
5-Year Return: 2.8%
10-Year Return: 2.5%

Our View:

This is an international fund and underlying fund invests primarily in companies that are into food and agricultural value chain.
Its underlying fund top-10 share holdings are Nestle SA, Zoetis, John Bean Tech, Compass Group, Graphic Packaging, Symrise AG, Bunge Global, Jamieson Wellness and AGCO Corp.
This fund has generated 3.5% annualised returns since inception. Even investing in a simple bank FD would have generated higher returns. The hidden fact is that the underlying fund has generated zero returns in the last 13 years.
If you have invested in such funds, you may review and exit appropriately.

#4 – Axis Greater China Equity FoF – 3 Years Annualised Returns – Minus 8.4%
Investment Objective:
To provide long term capital appreciation by predominantly investing in units of Schroder International Selection Fund Greater China, a fund that aims to provide capital growth by investing in equity and equity related securities of People’s Republic of China, Hong Kong SAR and Taiwan companies.
Performance Details
Absolute Returns of the fund (Direct Plans)

1-Year Return: 4%
2-Year Return: 1.7%
3-Year Return: minus 23.3%
Return since inception: minus 27.7%

Annualised Returns of the fund (Direct Plans)

1-Year Return: 4%
2-Year Annualised Return: 0.8%
3-Year Annualised Return: minus 8.4%
Return since inception: minus 9.44%

Our View:

Even this is a global mutual fund that invests in another fund which invests in companies of China and Hongkong. Global funds are riskier as these have geo-political risks, foreign exchange conversion risk etc.,
Its underlying fund top-5 share holdings are Taiwan Semiconductor, Tencent, Alibaba Group, AIA Group and Media Tek Inc.
This underlying fund has generated 2.3% annualised return in the last 5 years.
Like I indicated in earlier sections, China and Hongkong markets have been falling in the last 3 years with no signs of revival in near term. If you have already invested in such mutual funds, you may hold for some more time. Avoid making fresh investments or SIPs for now.

#5 – PGIM India Emerging Markets Equity Fund – 3 Years Annualised Returns – Minus 8%
Investment Objective:
This fund invests in another fund named PGIM Jennison Emerging Markets Equity Fund. The primary investment objective of the scheme is to generate long-term capital growth by investing in the units of PGIM Jennison Emerging Markets Equity Fund, which primarily invests in equity and equity-related securities of companies located in or economically tied to emerging markets countries.
Performance Details
Absolute Returns of the fund (Direct Plan)

1-Year Return: 27.1%
2-Year Return: 22.2%
3-Year Return: minus 22.1%
5-Year Return: 15.8%
10-Year Return: 21.7%

Annualised Returns of the fund (Direct Plans)

1-Year Return: 27.1%
2-Year Return: 10.5%
3-Year Return: minus 8%
5-Year Return: 3%
10-Year Return: 2%

Our View:

This is a global mutual fund that invests in another fund focused on rapidly growing companies around the developing world.
Its underlying fund currently invests in India, Taiwan, China, Brazil, South Korea, etc.
Top 10 holdings include Taiwan Semiconductor, Makemytrip, NU Holdings, Varun Beverages, M&M, XP-Class A, Mercadolibre, Meituan, KE Holdings etc.,
This fund has generated 3.8% annualized returns since inception.
We have highlighted this fund earlier indicating this as Worst Performing SIP Mutual Fund in the last 3 years, 5 years and 10 years time frame.
If you have already invested in such mutual funds, you may consider holding for some more time before exiting. Avoid making any fresh investments or SIPs now.

#6 – Franklin Asian Equity Fund – 3 Years Annualised Returns – Minus 5.8%
Investment Objective:
The scheme aims to provide medium to long term capital appreciation through investment in Asian companies/sectors, excluding Japan.
Performance Details
Absolute Returns of the fund (Direct Plans)

1-Year Return: 7.9%
2-Year Return: 7.5%
3-Year Return: minus 12.9%
5-Year Return: 33.9%
10-Year Return: 96.1%

Annualised Returns of the fund (Direct Plans)

1-Year Return: 7.9%
2-Year Return: 3.7%
3-Year Return: minus 4.5%
5-Year Return: 6%
10-Year Return: 6.9%

Our View:

This is a global fund that invests in companies in the Asian market ex-Japan.
Its underlying fund top-10 share holdings are Taiwan Semiconductor, Samsung Electronics, ICICI Bank, Tencent, HDFC Bank, Reliance, L&T, Zomato, AIA Group and Hyundai Motors.
This fund has generated 7.2% annualised returns since inception. You can get such returns even by investing in a simple fixed deposit without taking risks.
Majority of its portfolio is in China region where for such stock markets there is no sign of revival for now. If you have already invested in such mutual funds, you may hold for some more time. Avoid any fresh investments or fresh funds through SIP.

#7 – Edelweiss Emerging Markets Opportunities Equity Offshore Fund – 3 Years Annualised Returns – Minus 5.2%
Investment Objective:
The scheme seeks to provide long term capital growth by investing predominantly in the JPMorgan Funds – Emerging Markets Opportunities Fund, an equity fund which invests primarily in an aggressively managed portfolio of emerging market companies.
Performance Details
Absolute Returns of the fund (Direct Plan)

1-Year Return: 9.9%
2-Year Return: 7.9%
3-Year Return: minus 14.8%
5-Year Return: 29.6%

Annualised Returns of the fund (Direct Plans)

1-Year Return: 9.9%
2-Year Return: 3.8%
3-Year Return: minus 5.2%
5-Year Return: 5.3%

Our View:

This is a global mutual fund that invests in another fund focused emerging market.
Its underlying fund currently invests in India, Taiwan, China, Brazil, South Korea, etc.
Top 10 holdings include Taiwan Semiconductor, Tencent Holdings, Samsung Electronics, Reliance Industries, Wal Mart de Mexico SAB, HDFC Bank, China Construction Bank, Kia Corp and Haier Smart Home
This fund has generated 4.8% annualized returns since inception.
If you have already invested in such mutual funds, you may consider holding for some more time before exiting. Avoid making any fresh investments or SIPs now.

#8 – HSBC Global Emerging Markets Fund – 3 Years Annualised Returns – Minus 2.7%
Investment Objective:
The primary investment objective of the Scheme is to provide long term capital appreciation by investing predominantly in units/shares of HSBC Global Investment Funds – Global Emerging Markets Equity Fund.
Performance Details
Absolute Returns of the fund (Direct Plan)

1-Year Return: 10.8%
2-Year Return: 3.5%
3-Year Return: minus 8%
5-Year Return: 43.1%
10-Year Return: 72.2%

Annualised Returns of the fund (Direct Plans)

1-Year Return: 10.8%
2-Year Return: 1.5%
3-Year Return: minus 2.7%
5-Year Return: 7.4%
10-Year Return: 5.5%

Our View:

This is a global mutual fund that invests in another fund focused emerging market.
Its underlying fund currently invests in India, Taiwan, China, Brazil, South Korea, etc.
Top 10 holdings include Taiwan Semiconductor, Tencent Holdings, Samsung Electronics, Reliance Industries, Wal Mart de Mexico SAB, HDFC Bank, China Construction Bank, Kia Corp and Haier Smart Home
This fund has generated 4.8% annualized returns since inception.
This fund was part of 5 Worst Performing Mutual Funds in the last 5 years article too.
If you have already invested in such mutual funds, you may consider holding for some more time before exiting. Avoid making any fresh investments or SIPs now.

#9 – HSBC Brazil Fund – Minus 2.6%
Investment Objective:
The primary investment objective of the Scheme is to provide long term capital appreciation by investing predominantly in units/shares of HSBC Global Investment Funds (HGIF) Brazil Equity Fund.
Performance Details
Absolute Returns of the fund (Direct Plan)

1-Year Return: 0.7%
2-Year Return: minus 4.2%
3-Year Return: minus 7.7%
5-Year Return: 15%
10-Year Return: 17%

Annualised Returns of the fund (Direct Plans)

1-Year Return: 0.7%
2-Year Return: minus 2.1%
3-Year Return: minus 2.6%
5-Year Return: minus 3.1%
10-Year Return: minus 1.8%

Our View:

This is a global mutual fund that invests in another fund, focusing on companies in Brazil.
Its underlying fund allocates 96% to Brazilian equity and 4% to TREPS.
Top 10 holdings include Vale Do Rio Doce, Banco Bradesco SA, Petroleo Brasileiro SA Petrobras, Itau Unibanco Holding SA, Banco BTG Pactual SA, WEG SA, B3 SA Brasil Bolsa Balcao, Suzano SA, Prio SA and Basic Sanitation Company of the State of Sao Paulo.
The fund has generated minus 2.6% annualized returns since inception.
According to a report from Nasdaq on the Brazil Stock Market, anticipated further decline in inflation to 4% by the close of 2024 suggests considerable potential for interest rate reductions, expected to provide favorable support for both equities and bonds in Brazil.
If you have already invested in such mutual funds, you may consider holding for some more time. Avoid making any fresh investments or SIPs now.

#10 – Kotak Global Emerging Market Fund – 3 Years Annualised Returns – Minus 1.6%
Investment Objective:
The scheme aims to invest a greater proportion of assets in overseas mutual funds investing in globally emerging market funds.
Performance Details
Absolute Returns of the fund (Direct Plans)

1-Year Return: 14.5%
2-Year Return: 11.4%
3-Year Return: minus 4.8%
5-Year Return: 50.2%
10-Year Return: 69%

Annualised Returns of the fund (Direct Plans)

1-Year Return: 14.5%
2-Year Return: 5.5%
3-Year Return: minus 1.6%
5-Year Return: 8.4%
10-Year Return: 5.3%

Our View:

This is an international fund and underlying fund invests primarily in companies in Latin America and other non UK countries.
The underlying top-10 equity holdings are Taiwan Semiconductor, MercadoLibre, MediaTek, Banco do Brasil SA, AIA Group Ltd, SK Hynix, Wal Mart de Mexico SAB, Credicorp, Infosys and Grupo Financiero Banorte SAB.
This fund has generated 5.83% annualised return since inception.
We could see revival in the fund performance in the last 2 years, hence if you have invested in such funds continue to stay some more time before you review and exit.

#11 – Kotak International REIT Fund (FoF) – 3 Years Annualised Returns – Minus 1.7%
Investment Objective:
The investment objective of the scheme is to provide long-term capital appreciation and income by investing in units of SMAM ASIA REIT Sub Trust fund and/or the other similar overseas REIT funds.
Performance Details
Absolute Returns of the fund (Direct Plans)

1-Year Return: 2.7%
2-Year Return: 6.2%
3-Year Return: minus 4%

Annualised Returns of the fund (Direct Plans)

1-Year Return: 2.7%
2-Year Return: minus 3.1%
3-Year Return: minus 1.7%

Our View:

This is an international fund and underlying fund invests primarily in companies in REITs in APAC region.
This fund has generated 5.83% annualised return since inception.
We could see revival in the fund performance in the last 2 years, hence if you have invested in such funds continue to stay some more time before you review and exit.

#12 – DSP World Gold FoF – 3 Years Annualised Returns – Minus 0.1%
Investment Objective:
The primary investment objective of the Scheme is to seek capital appreciation by investing in units/securities issued by overseas Exchange Traded Funds (ETFs) and/or overseas funds and/or units issued by domestic mutual funds that provide exposure to Gold/Gold Mining theme. The Scheme may also invest a certain portion of its corpus in money market securities and/or money market/liquid schemes of DSP Mutual Fund, in order to meet liquidity requirements from time to time. However, there is no assurance that the investment objective of the Scheme will be realized.
Performance Details
Absolute Returns of the fund (Direct Plans)

1-Year Return: 15.7%
2-Year Return: 18.4%
3-Year Return: minus 0.1%
5-Year Return: 87.3%
10-Year Return: 95.5%

Annualised Returns of the fund (Direct Plans)

1-Year Return: 15.7%
2-Year Return: 8.8%
3-Year Return: minus 0.1%
5-Year Return: 13.3%
10-Year Return: 6.9%

Our View:

This is an international fund and underlying fund invests primarily in ETFs or mutual funds with exposure to gold or gold mining companies.
This fund has generated 1% annualised return since inception. Means you would have got nothing if you invested 10 years back.
While we could see gold prices going up recently, in the medium to long term, one can expect returns inline with a simple bank FD. If you have invested in such funds, you may hold or exit based on your investment objective.

How to avoid falling in the trap of “worst Performing Funds”?
Like I keep indicating in our earlier articles, investing in mutual funds should be based on financial goals, risk appetite, and investment tenure.
A diversified mutual fund portfolio can be built with large-cap, mid-cap, small-cap, flexi-cap, and global funds across AMCs. Investors can consider selecting 6-8 mutual funds across these categories. Even if a couple of mutual funds underperform, other schemes can potentially compensate, which can help investors to generate decent returns. There is nothing beyond in your hands taking these steps.

Suresh KP is the Founder of Myinvestmentideas. He is NISM Certified – Investment Adviser and NISM Certified – Research Analyst. He has been analyzing financial markets in the last 20 years.He can be reached at suresh@myinvestmentideas.com Latest posts by Suresh KP (see all)