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34 equity mutual funds lost money in 1 year. But their 5-year returns tell a different story
7 min read | Updated on September 08, 2026, 14:04 IST
SUMMARY
Volatility is an inevitable part of investing, and risk comes with the potential for returns. Even Warren Buffett, one of the world’s most successful investors, has seen his investments fall during difficult market periods.
If you are investing with a long-term goal, one year of negative returns should not worry you or make you give up on your investment plan.
Equity mutual fund investors have had a mixed experience over the past year. Of the 221 equity mutual fund schemes reviewed across large-cap, mid-cap, small-cap, flexi-cap, multi-cap and large-and-mid-cap categories, 34 schemes recorded negative one-year returns, based on ACE MF data.
The losses, however, do not tell the complete story. The longer-term picture, however, is less worrying. Several of the funds that are currently in the red over one year have delivered positive returns over five years, with some generating more than 14% annually during the period.
The five-year numbers present a different picture for several schemes. Motilal Oswal Mid Cap Fund delivered the highest five-year return at 21.12% among the schemes for which five-year data is available. HDFC Small Cap Fund and Tata Small Cap Fund followed with returns of 14.60% and 14.25%, respectively. Nippon India Large Cap Fund delivered 12.81%, while Franklin India Flexi Cap Fund returned 11.76%.
1-Year vs 5-Year Returns
| # | Fund Name | 1-Year Return | 5-Year Return | |
|---|---|---|---|---|
| 1 | Aditya Birla SL Large Cap | -0.84% | 8.90% | |
| 2 | Axis Large Cap Fund Regular | -0.74% | 5.12% | |
| 3 | Canara Rob Large and Mid Cap Fund-Reg(G) | -0.54% | 9.99% | |
| 4 | Canara Rob Large Cap Fund-Reg(G) | -1.72% | 8.06% | |
| 5 | DSP Large Cap Fund-Reg(G) | -2.76% | 8.44% | |
| 6 | Franklin India Flexi Cap Fund(G) | -0.92% | 11.76% | |
| 7 | Franklin India Large Cap Fund(G) | -0.37% | 7.79% | |
| 8 | HDFC Small Cap Fund (G) | -1.54% | 14.60% | |
| 9 | HSBC Large Cap Fund(G) | -0.09% | 8.37% | |
| 10 | ICICI Pru Large Cap Fund (G) | -1.96% | 11.11% | |
| 11 | Kotak Large Cap Fund (IDCW) | -0.41% | 8.48% | |
| 12 | LIC MF Large Cap Fund Reg (G) | -3.68% | — | |
| 13 | Mahindra Manulife Flexi Cap Fund-Reg(G) | -0.65% | 9.71% | |
| 14 | Mahindra Manulife Large Cap Fund-Reg(G) | -3.69% | 7.41% | |
| 15 | Mirae Asset Large Cap Fund Regular (G) | -0.75% | 7.28% | |
| 16 | Motilal Oswal Large Cap Fund-Reg(G) | -0.55% | No data | |
| 17 | Motilal Oswal Mid Cap Fund-Reg(G) | -0.16% | 21.12% | |
| 18 | NJ Flexi Cap Fund Regular (G) | -5.83% | No data | |
| 19 | Nippon India Large Cap Fund (G) | -1.90% | 12.81% | |
| 20 | Parag Parikh Flexi Cap Fund-Reg(G) | -2.72% | 11.33% | |
| 21 | PGIM India Large Cap Fund (G) | -2.93% | 5.56% | |
| 22 | Samco Flexi Cap Fund-Reg(G) | -4.05% | No data | |
| 23 | Samco Large & Mid Cap Fund-Reg(G) | -5.98% | No data | |
| 24 | Samco Large Cap Fund-Reg(G) | -7.42% | No data | |
| 25 | Samco Multi Cap Fund-Reg(G) | -3.34% | No data | |
| 26 | Shriram Flexi Cap Fund-Reg(G) | -0.57% | 6.24% | |
| 27 | Sundaram Flexi Cap Fund-Reg(G) | -2.77% | No data | |
| 28 | Sundaram Large Cap Fund-Reg(G) | -1.03% | 6.78% | |
| 29 | Tata Flexi Cap Fund-Reg (G) | -2.80% | 8.09% | |
| 30 | Tata Large and Mid Cap Fund-Reg (G) | -3.50% | 8.64% | |
| 31 | Tata Small Cap Fund-Reg (G) | -1.08% | 14.25% | |
| 32 | Union Flexicap Fund-Reg (IDCW) | -0.28% | 9.53% | |
| 33 | Union Largecap Fund-Reg (G) | -0.86% | 7.01% | |
| 34 | UTI Largecap Fund-Reg (IDCW) | -2.69% | 6.44% |
Returns below one year are absolute returns, while returns for periods of more than one year are expressed as CAGR.
Only nine schemes were negative over six months
The six-month numbers paint a somewhat different picture. Of the 221 schemes reviewed, only nine recorded negative returns over six months.
Mahindra Manulife Large Cap Fund posted the biggest six-month decline at 2.03%, followed by Samco Large & Mid Cap Fund at 1.90%, Samco Large Cap Fund at 1.88% and DSP Large Cap Fund at 1.86%.
ICICI Prudential Large Cap Fund declined 1.06%, while Parag Parikh Flexi Cap Fund fell 0.86%. Sundaram Flexi Cap Fund, Kotak Large Cap Fund and HSBC Large Cap Fund saw smaller declines of 0.23%, 0.13% and 0.09%, respectively.
6-month negative-return schemes
| Scheme | Category | 6-Month Return (%) |
|---|---|---|
| Mahindra Manulife Large Cap Fund | Large Cap | -2.03 |
| Samco Large & Mid Cap Fund | Large & Mid Cap | -1.90 |
| Samco Large Cap Fund | Large Cap | -1.88 |
| DSP Large Cap Fund | Large Cap | -1.86 |
| ICICI Prudential Large Cap Fund | Large Cap | -1.06 |
| Parag Parikh Flexi Cap Fund | Flexi Cap | -0.86 |
| Sundaram Flexi Cap Fund | Flexi Cap | -0.23 |
| Kotak Large Cap Fund | Large Cap | -0.13 |
| HSBC Large Cap Fund | Large Cap | -0.09 |
Meanwhile, the large-cap mutual funds witnessed sharp outflows of ₹1321 crore as investors flocked to mid- and small-cap funds in the equity category in July 2026, according to the latest AMFI data released on August 11.
Should investors be worried?
Volatility is an inevitable part of investing, and risk comes with the potential for returns.
"Markets go through ups and downs, but history has shown that they have recovered from periods of weakness over time. For investors starting their journey now, market volatility can even provide an opportunity to accumulate more units at lower prices. The key is to stay focused on your financial goals rather than short-term movements. If your goals and investment horizon remain unchanged, temporary market fluctuations need not change your investment strategy. Patience and discipline can turn volatility into an opportunity for long-term wealth creation," said Shweta Shastri, CFP and founder at Finnora wealth studio.
For someone holding one of these funds does not necessarily mean that they need to panic. After all, equity mutual funds can go through periods of losses.
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