Nearly 95% of Mutual Funds Posted Negative Returns in September

Key Takeaways

• An analysis of 666 mutual fund schemes found that 634, or nearly 95%, delivered negative returns during September.
• The Nifty 50 declined 5.56% over the same period.
• Technology-focused schemes featured prominently among the month’s weakest performers, with some losses exceeding 9%.

September proved difficult across most of the mutual fund universe, with nearly 95% of schemes analysed by ETMutualFunds ending the month with negative returns.

Of the 666 funds included in the study, 634 finished in the red. The broad decline coincided with a 5.56% fall in the Nifty 50 during September.

The losses were particularly pronounced among technology-oriented funds.

The five weakest schemes in the analysis were technology-focused, while three of them declined by more than 9% during the month.

Weakness was not confined to sectoral funds.

HDFC Mid Cap Fund lost 6.40% during September. Aditya Birla Sun Life MNC Fund and Edelweiss Flexi Cap Fund each declined 6.21%, while several mid-cap schemes posted losses of slightly above 6%.

Large-cap funds were also affected. HDFC Large Cap Fund and WhiteOak Capital Large Cap Fund declined 5.82% each, while JioBlackRock Large Cap Fund fell 5.54%.

The breadth of the decline is the central feature of the data.

Mutual fund categories differ considerably in portfolio composition, market-cap exposure and sector concentration. Yet the September correction was broad enough for 634 of the 666 analysed schemes to post a negative monthly number.

Monthly performance should still be read differently from longer-period returns.

A one-month decline captures a particular market phase and can be disproportionately influenced by sharp moves in specific sectors. Equity mutual funds are generally structured around longer investment horizons, while debt, hybrid and international funds respond to different underlying markets and risk factors.

Even so, the September numbers offer a clear snapshot of how extensively the equity-market weakness affected mutual fund portfolios.

Rather than losses being isolated to a small set of thematic products, negative returns spread across most of the schemes included in the study.