Christmas is often the time when investors pause, look back at the year, and review how their investments have performed. Many book profits, some rebalance their portfolios, and others closely examine funds that failed to deliver. While several equity mutual funds posted solid gains over the past year, a few were badly hit by sector rotation and market corrections.
In this article, we take a closer look at 10 mutual funds that crashed the most since last Christmas, recording losses between -12% and -18% over the past year. Most of these funds are linked to real estate, momentum strategies, technology, and small-cap factor-based themes. Their performance shows how focused strategies can struggle when market cycles change.
What Are Equity Mutual Funds?
Equity mutual funds mainly invest in shares of listed companies with the aim of generating long-term wealth. Depending on their investment style, these funds may focus on specific sectors like real estate or technology, follow themes such as momentum or quality, or invest across different market capitalisations.
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While equity funds can create significant wealth over time, sectoral and thematic funds are usually more volatile. When market sentiment turns or economic conditions shift, these funds can see sharp declines — exactly what happened to some of the worst-performing funds since last Christmas.
Fund Tracking Nifty Realty Index
Objective: To mirror the performance of the Nifty Realty Index with minimal tracking error.
Performance:
- 1 Year Return: -17.9%
- 3 Year CAGR: NA
- 5 Year CAGR: NA
Who Can Invest: Long-term investors with high risk tolerance
Risk Factors:
- Sector concentration risk
- Dependence on credit availability
#4 – Shriram Multi Sector Rotation Fund (-16.6%)
Fund Objective: To rotate investments across sectors based on economic cycles.
Performance:
- 1 Year Return: -16.6%
- 3 Year CAGR: NA
- 5 Year CAGR: NA
Who Can Invest: Investors preferring tactical sector allocation
Risk Factors:
- Incorrect sector timing
- Higher portfolio churn
#5 – Samco Flexi Cap Fund (-16.6%)
Fund Objective: To invest flexibly across large-cap, mid-cap, and small-cap stocks.
Performance:
- 1 Year Return: -16.6%
- 3 Year CAGR: 4.2%
- 5 Year CAGR: NA
Who Can Invest: Investors with a long-term horizon
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Risk Factors:
- Mid and small-cap volatility
- Aggressive allocation during market corrections
#6 – Samco Active Momentum Fund (-14.6%)
Fund Objective: To invest in stocks showing strong price momentum.
Performance:
- 1 Year Return: -14.6%
- 3 Year CAGR: NA
- 5 Year CAGR: NA
Who Can Invest: High-risk investors seeking momentum strategies
Risk Factors:
- Sharp trend reversals
- High volatility during market corrections
#7 – Union Active Momentum Fund (-14.1%)
Fund Objective: To capture market momentum through active stock selection.
Performance:
- 1 Year Return: -14.1%
- 3 Year CAGR: NA
- 5 Year CAGR: NA
Who Can Invest: Investors with an aggressive risk appetite
Risk Factors:
- Momentum factor cyclicality
- Underperformance during sideways markets
#8 – Quant Teck Fund (-13.7%)
Fund Objective: To invest mainly in technology and digital economy stocks.
Performance:
- 1 Year Return: -13.7%
- 3 Year CAGR: NA
- 5 Year CAGR: NA
Who Can Invest: Long-term investors bullish on technology
Risk Factors:
- Global IT spending slowdown
- Currency and valuation risks
#9 – Mirae Asset Nifty Smallcap 250 Momentum Quality 100 ETF FoF (-12.2%)
Fund Objective: To invest in a momentum and quality-based small-cap ETF.
Performance:
- 1 Year Return: -12.2%
- 3 Year CAGR: NA
- 5 Year CAGR: NA
Who Can Invest: Aggressive investors with a long holding period
Risk Factors:
- Small-cap volatility
- Liquidity risks during corrections
#10 – DSP Nifty Smallcap 250 Quality 50 Index Fund (-11.9%)
Fund Objective: To track quality-focused small-cap stocks.
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Performance:
- 1 Year Return: -11.9%
- 3 Year CAGR: NA
- 5 Year CAGR: NA
Who Can Invest: Investors seeking factor-based small-cap exposure
Risk Factors:
- Sharp drawdowns during risk-off phases
- Higher volatility than large caps
Key Takeaways
- Realty Sector Hit Hard: Realty index funds dominated the list of worst performers
- Momentum Strategies Struggled: Momentum-based funds suffered during trend reversals
- Thematic Concentration Risk: Sector-heavy portfolios can magnify losses
- Short-Term Returns Can Mislead: One-year performance alone should not drive decisions
Conclusion
The past year since Christmas has been tough for certain equity mutual fund categories. Funds focused on real estate, momentum, and technology faced sharp corrections due to sector rotation, macro uncertainty, and valuation adjustments.
Investors should avoid reacting only to short-term losses. Instead, they should assess whether a fund’s strategy still fits their long-term goals and risk tolerance. Proper diversification across sectors, styles, and market caps remains one of the most reliable ways to manage downside risk.
Market history shows that today’s underperformers can become tomorrow’s leaders when cycles turn. In equity investing, patience and discipline continue to be the most valuable tools.
FAQs
1. Why did these mutual funds fall so sharply since last Christmas?
Most of these funds are linked to specific sectors or themes that underperformed due to market corrections and sector rotation.
2. Are equity mutual funds risky?
Yes, equity mutual funds can be volatile, especially sectoral and thematic funds, but they also offer long-term growth potential.
3. Should investors exit funds after one year of poor returns?
One-year performance should not be the sole reason to exit. Long-term goals and strategy alignment matter more.
4. Why did momentum funds struggle during this period?
Momentum strategies tend to suffer when market trends reverse or move sideways.
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5. How can investors reduce risk in equity investing?
Diversifying across sectors, investment styles, and market capitalisations helps manage downside risk.
Ajay Yadav is a financial writer who simplifies money, savings, and investing for everyday readers. He creates easy-to-understand content that helps people make smarter financial decisions and build long-term wealth.
