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Investors Beware! Underperforming Funds From Axis, LIC MF and Others Raise Concerns

Posted on 22nd May 2026 12:18 pm by rohit kumar

Large-cap mutual funds are often considered one of the safest investment options in the equity market. Since these schemes primarily invest in India’s biggest and most established companies, investors usually expect stable growth, lower risk, and reliable long-term returns.

 

However, not every large-cap fund has managed to reward investors equally.

 

A closer look at the performance of several major mutual fund schemes over the past five years reveals that some well-known large-cap funds have significantly underperformed category leaders. In fact, a few schemes even delivered negative returns over the past year, raising concerns among investors about portfolio quality and fund management efficiency.

 

Here’s a detailed look at four large-cap mutual funds that have struggled to impress investors despite carrying strong brand names.

 

1. Axis Mutual Fund’s Axis Large Cap Fund Struggles With Weak Returns

 

The Axis Large Cap Fund has emerged as one of the weakest performers among large-cap mutual fund schemes in recent years.

 

Over the last five years, the fund has generated a CAGR return of only 8.65%, which is significantly lower than several category peers. More concerning for investors is the fund’s one-year performance, where it posted a negative CAGR return of -3.27%.

 

Key Details:

5-Year Return: 8.65% CAGR

1-Year Return: -3.27%

NAV: ₹65.90

Expense Ratio: 0.85%

AUM: ₹30,498.17 crore

Minimum Investment: ₹100

Minimum SIP: ₹100

 

The fund’s portfolio includes major blue-chip companies such as ICICI Bank, HDFC Bank, and Reliance Industries.

 

2. PGIM India Mutual Fund’s Large Cap Fund Also Disappoints

 

The PGIM India Large Cap Fund also delivered below-average returns compared to leading funds in the category.

 

The scheme generated a five-year CAGR of just 9.51%, while its one-year return slipped into negative territory at -2.05%.

 

Key Details:

5-Year Return: 9.51% CAGR

1-Year Return: -2.05%

NAV: ₹385.14

Expense Ratio: 0.90%

AUM: ₹544.39 crore

Minimum Investment: ₹5,000

Minimum SIP: ₹1,000

 

The fund’s major holdings include HDFC Bank, Reliance Industries, and Kotak Mahindra Bank.

 

3. LIC Mutual Fund Large Cap Fund Fails to Match Investor Expectations

 

The LIC MF Large Cap Fund has also struggled to generate strong long-term returns despite the trust associated with the LIC brand.

 

Over the past five years, the fund delivered a CAGR return of only 9.67%, placing it among the weaker performers in the large-cap segment.

 

Key Details:

5-Year Return: 9.67% CAGR

NAV: ₹59.06

Expense Ratio: 1.01%

AUM: ₹1,352.11 crore

Minimum Investment: ₹5,000

Minimum SIP: ₹200

 

Market experts note that higher expense ratios combined with weaker portfolio performance have reduced the attractiveness of the fund for many long-term investors.

 

4. Franklin Templeton India Large Cap Fund Delivers Moderate but Weak Category Performance

 

The Franklin India Large Cap Fund performed slightly better than the previously mentioned funds but still lagged behind top-performing large-cap schemes.

 

The fund generated a five-year CAGR return of 10.24%, which remains below several category leaders.

 

Key Details:

5-Year Return: 10.24% CAGR

NAV: ₹1,086.04

Expense Ratio: 1.17%

AUM: ₹7,235.57 crore

Minimum Investment: ₹5,000

Minimum SIP: ₹500

 

Despite its relatively better numbers, analysts believe the fund has not fully capitalized on bullish market phases over the past few years.

 

Nippon India Mutual Fund Emerges as Category Leader

 

While several large-cap schemes struggled, the Nippon India Large Cap Fund emerged as one of the strongest performers in the category.

 

The fund delivered an impressive five-year CAGR return of 17.04%, significantly outperforming many rivals.

 

Key Highlights:

5-Year Return: 17.04% CAGR

NAV: ₹98.39

 

Its portfolio also includes leading companies such as ICICI Bank, HDFC Bank, and Reliance Industries, highlighting that stock selection and fund strategy play a crucial role in performance.

 

Why Are Some Large Cap Funds Underperforming?

 

Experts believe multiple factors may have contributed to weak returns in certain large-cap schemes:

 

Poor portfolio allocation

Delayed sector rotation strategies

Higher expense ratios

Weak stock selection

Underexposure to fast-growing sectors

Market volatility and profit-booking

 

Investors are increasingly focusing on consistent performance, risk-adjusted returns, and fund management quality rather than simply relying on brand reputation.

 

Should Investors Exit Underperforming Funds?

 

Financial advisors suggest investors should avoid making emotional decisions based solely on short-term underperformance. Instead, they recommend evaluating:

 

Consistency of long-term returns

Benchmark comparison

Fund manager strategy

Expense ratio

Portfolio quality

Risk profile

 

If a fund consistently underperforms its benchmark and peers over multiple years, investors may consider rebalancing their portfolios.

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