One of the important aspects of financial planning is portfolio diversification. Experts continue to say don’t put all your eggs in one basket. Some critics will condemn it. He wants to keep it simple and invest in one or two mutual funds.What happens if such an investor ends up making peanuts on his investments over a long period of time, say 10 years? In this article we will talk about: 5 Worst-Performing Mutual Funds of the Past 10 Years (March 15, 2013 to March 14, 2024) We will discuss funds that are generating poor returns, along with our views on such funds. This helps investors avoid falling into traps and ruining their investments.
Also read: 20 mutual funds with positive returns every year over the past 10 years
How did we weed out the worst-performing mutual funds of the past decade?
We considered all equity mutual funds, including sector funds and thematic mutual funds, but excluded ETFs from this analysis.
Funds established within the last 10 years are not included in this list as we focused on performance over the past 10 years.
To identify the worst-performing funds, we sorted the funds based on their returns over the past 10 years and selected the bottom 10 funds with the lowest returns.
These 10 mutual funds produced annualized returns ranging from 1% to 5.1%.
You may wonder why such funds are producing poor returns when the stock market has produced large returns over the past decade. Let’s take a closer look at such funds.
List of Top 5 Worst Performing Mutual Funds of the Past 10 Years
Here are the top five mutual funds that have returned between 1% and 5% annually over the past 10 years.
#1 – PGIM India Emerging Markets Equity Fund – 10 years annualized return – 1.3%
2nd place – DSP Global Agricultural Fund – 10-year annualized return – 2.6%
3rd place – DSP Global Energy Fund – 10-year annualized return – 2.6%
#4 – DSP World Gold FoF – 10-year annualized return – 3.1%
No. 5 – Invesco India – Invesco Pan-European Equity FoF – 10-year annualized return – 5.3%
The 5 Worst Performing Mutual Funds of the Last 10 Years – A Deep Dive into These Funds
No. 1 – PGIM India Emerging Markets Equity Fund – Annualized return over the past 10 years – 1.3%
Investment purpose:
The principal investment objective of the scheme is to generate long-term capital growth by investing in units of the PGIM Jennison Emerging Markets Equity Fund, which primarily invests in companies located in or associated with emerging market countries. Invests in the stocks and stock-related securities of economically connected companies.
Performance details
Absolute return of the fund (direct plan)
- 1 year return: 22.9%
- 2 year return: 3.86%
- 3 year return: -23.8%
- 5 year return: 8.7%
- 10 year return: 14.4%
Fund annualized return (Direct Plan)
- 1 year return: 12.9%
- 2-year annualized return: 1.9%
- 3-year annualized return: -8.6%
- 5-year annualized return: 1.6%
- 10-year annualized return: 1.3%
Our view:
- This is a global mutual fund that invests in separate funds focused on fast-growing companies in developing countries.
- The underlying fund has 28% invested in India, 23% in Taiwan, 13% in China, and 11% in Brazil.
- The company’s top 10 holdings include Makemytrip, Taiwan Semiconductor, Mercodlibre, XP-Class A, NU/Cayman Islands, Varun Beverages, Alchip Technologies, M&M, PDD, and ASPEED Technologies.
- The fund has returned 3.4% annually since its inception.
- As noted in a previous article, as reported by CNN; China’s stock market has suffered losses of $6 trillion in the past three years This is due to a variety of issues, including record lows in real estate, deflation, debt, falling birth rates, a shrinking workforce, and a shift toward ideologically driven policies that destabilize the private sector and scare away foreign companies. There is.
- The Chinese market has been in a slump for the past three years, and there are currently no signs of a revival. Meanwhile, Taiwan’s stock market plunged more than 30% in 2022, but has since recovered over the past year and a half.
- If you already have investments in such mutual funds, you may consider holding onto them for a while. Do not make any new investments or SIPs now.
2nd place – DSP Global Fund for Agriculture – Annual return over the past 10 years – 2.6%
Investment purpose:
The main investment objective of the scheme is to seek capital growth primarily by investing in units of the BlackRock Global Fund – Nutrition Fund (BGF – NF).
This underlying fund will invest at least 70% of its total assets in stocks of companies engaged in any activity that forms part of the food and agriculture value chain, including packaging, processing, distribution, technology, food and agriculture-related services. is invested all over the world.Seeds, agricultural or food grade chemicals, and food producers
Performance details
Absolute return of the fund (direct plan)
- 1 year return: -3.4%
- 2 year return: -12.2%
- 3 year return: -18.8%
- 5 year return: 15.7%
- 10 year return: 31.3%
Annual percentage return of the fund (Direct Plan)
- 1 year return: -3.4%
- 2 year return: -6.2%
- 3 year return: -6.7%
- 5 year return: 2.9%
- 10 year return: 2.6%
Our view:
- This is an international fund and the underlying funds invest primarily in companies within the food and agriculture value chain.
- The company’s underlying fund’s top 10 holdings include Graphic Packaging, Nestlé SA, Compass Group, Zoetis, John Bean Tech, China Menu, Bungle Global, Smurfit Kappa, Avery Dennison Corporation, and Costco Wholesale Corporation. It is included.
- The fund has returned 3.8% annually since its inception. The hidden fact is that the underlying fund has had zero returns for the past 12 and a half years.
- If you have invested in such funds, you can review and withdraw as appropriate.
You may like: 5 mutual fund schemes with returns of 3,370% to 4,700% over 20 years
3rd place – DSP Global Energy Fund – Annual return over the past 10 years – 2.6%
Investment purpose:
The open-ended fund of funds scheme invests primarily in units of the BlackRock Global Fund – World Energy Fund (BGF-WEF) and BlackRock Global Fund – Sustainable Energy Fund (BGF – SEF). We aim to increase capital by doing so.
Performance details
Absolute return of the fund (direct plan)
- 1 year return: 4.7%
- 2 year return: 17.6%
- 3 year return: 16.2%
- 5 year return: 41.5%
- 10 year return: 31.9%
Annual percentage return of the fund (Direct Plan)
- 1 year return: 4.7%
- 2 year return: 8.4%
- 3 year return: 5.1%
- 5 year return: 7.1%
- 10 year return: 2.8%
Our view:
- A global fund that invests in ETFs that invest in companies in the energy sector.
- The fund has generated an annualized return of 4.5% since its inception.
- However, the fund’s performance has been poor, returning only 2.8% annually over the past 10 years. If you have already invested, please reconsider your decision and withdraw from such funds if possible.
4th place – DSP World Gold Fund FoF – Annualized return over the past 10 years – 3.1%
Investment purpose:
The primary investment objective of the scheme is units/securities issued by foreign exchange traded funds (ETFs) and/or foreign funds and/or domestic mutual funds offering exposure to gold/gold mining themes. The aim is to increase capital by investing in units issued by. . The Scheme may also invest a certain portion of its corpus in money market securities and/or money market/liquid schemes of DSP Mutual Funds to meet its liquidity requirements from time to time. However, there is no guarantee that the investment objectives of this plan will be realized.
Performance details
Absolute return of the fund (direct plan)
- 1 year return: 4.6%
- 2 year return: -11.5%
- 3 year return: 0.7%
- 5 year return: 47.9%
- 10 year return: 41%
Annual percentage return of the fund (Direct Plan)
- 1 year return: 4.6%
- 2 year return: -5.9%
- 3 year return: 0.2%
- 5 year return: 8.1%
- 10 year return: 3.1%
Our view:
- This is an international fund and the underlying funds primarily invest in ETFs or mutual funds with exposure to gold or gold mining companies.
- The underlying fund’s top 10 holdings include Barrick Gold Crop, Gold Fields, Endeavor Mining, Agnico Eagle Mines, B2 Gold Corp, Wheaton Precious Metals, and Northern Star Resources. , Alamos Gold, Newmont Corporation and Kinross Gold Corporation.
- The fund has generated an annualized return of -0.33% since the inception of the Direct Plan in January 2013. In other words, even if you invested 10 years ago, it’s still nothing.
- If you have invested in such funds, you can review and withdraw as appropriate.
No. 5 – Invesco India – Invesco Pan-European Equity FoF – Annualized Return Over Last 10 Years – 5.3%
Investment purpose:
The scheme is primarily intended to invest in units of the Invescopan European Equity Fund, an overseas equity fund that invests primarily in shares of European companies, mainly large companies.
The underlying fund aims to achieve long-term capital growth by investing in a portfolio of stocks or equity-related products of European companies with a focus on large companies.
Performance details
Absolute return of the fund (direct plan)
- 1 year return: 15.3%
- 2 year return: 33.2%
- 3 year return: 36.5%
- 5 year return: 61.7%
- 10 year return: 72.3%
Fund annualized return (Direct Plan)
- 1 year return: 15.3%
- 2 year return: 15.3%
- 3 year return: 10.9%
- 5 year return: 10%
- 10 year return: 5.3%
Our view:
- This is an international fund and the underlying fund invests in large European companies.
- The underlying fund’s top 10 holdings are Total, Roche NES, AstraZeneca, UPM-Kymmene, Merck, UniCredit, BP, Capgemini, Deutsche Telekom, and Sanof.
- The fund has generated an annualized return of 5.3% since the inception of the Direct Plan.
- There has been a resurgence in performance over the last five years.
- If you have invested in such funds, hold onto them for a little longer before deciding to withdraw.
Also read: 10 mutual funds with the worst performance over the past year
Conclusion regarding these funds:
When investing in mutual funds, avoid concentrating your investments in just one or two funds. Diversify your portfolio across different asset management companies (AMCs) and different market capitalizations.
As you can see, most of the funds mentioned above are global or international mutual funds. If your portfolio was diversified across domestic and international stocks and market capitalizations, even if those funds underperformed, they would be balanced out by the other funds in your portfolio. Even with such a diversified portfolio of funds, you can expect returns of 12% to 15% annually.
Suresh KP is the founder of Myinvestmentideas. He is a NISM Certified Investment Advisor and he is a NISM Certified Research Analyst. I have been analyzing financial markets for the past 20 years. He can be reached at suresh@myinvestmentideas.com.
