Mutual Fund Schemes with Less Than 10% Return Over the Past Decade

10 years is a long time when it comes to investing. With mutual funds gaining traction as an investment vehicle for long-term wealth creation, many investors assume that patience will automatically translate into strong returns. However, that is not always the case. There are mutual fund schemes that have underperformed even over a full decade. Here is the other side of the mutual fund story, schemes that delivered less than 10% annualised return over the last 10 years.

Mutual Funds with International Exposure 

Schemes with international equity exposure such as Nippon India Japan Equity Fund, Franklin Asian Equity Fund, and Aditya Birla Sun Life International Equity Fund have all delivered under 9% annualised returns in the last 10 years. 

Domestic Thematic Funds Lagged 

Even some domestic equity funds have not managed to breach the 10% mark. For example, the LIC MF Banking and Financial Services Fund, returned just over 8% per year. 

Flexi Cap Fund with Lower Than Expected Performance

A Flexi Cap Fund allows fund managers to shift allocation freely across large, mid and small cap stocks. However, LIC MF Flexi Cap Fund has still posted annualised returns of just 9.07% over a 10-year horizon. Despite its flexibility, this scheme has not delivered results in line with broader market expectations.

Expense Ratio Plays a Role in Net Returns

One common factor across all these schemes is a relatively high expense ratio, which directly reduces investor returns. All listed funds have an expense ratio above 2%, which may erode long-term compounding, especially in underperforming schemes.

Read More: Top 5 Performing Mutual Funds That Gave Highest Returns in Last 10 Years! 

Important Note on Data

The above data reflects the assets under management (AUM) as of May 31, 2025, and returns as of June 10, 2025. For Franklin Asian Equity Fund and Aditya Birla Sun Life International Equity Fund, returns are calculated based on NAVs available as of June 9, 2025.

Conclusion 

Not every mutual fund rewards long-term patience with high returns. It is important to stay informed and review fund performance regularly.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.