The number nobody puts in the ad
Fund marketing is built around one figure: the return. Five-year CAGR, since-inception CAGR, a chart sloping cheerfully upward. What almost nothing shows you is the road taken to get there — and that road is what actually decides whether you stay invested.
The measure for it is maximum drawdown: the worst peak-to-trough fall the fund has ever suffered. If a fund climbs to ₹100, drops to ₹58, and later recovers, its maximum drawdown is 42%. It tells you what holding this fund has felt like at its worst.
What Indian equity has actually done
Broad market falls are not rare events. They are a recurring feature.
| Episode | Roughly how far the market fell |
|---|---|
| 2008 global financial crisis | around 60% |
| 2020 covid crash | around 38% in about a month |
| Ordinary corrections | 10–20%, most years |
Indicative magnitudes for broad Indian equity indices, for scale. Any individual fund's own figure is what matters, and it is computed per fund on this site.
Mid-cap and small-cap funds fall harder than large-cap ones — often half again as far. That is the trade you accept in exchange for their higher long-run return. It is not a flaw in the fund; it is the source of the return.
The part that actually hurts: recovery time
A 40% fall needs a 67% gain to get back to level, because the gain works on a smaller base. That asymmetry is why recovery takes years rather than months, and why the honest question is not "how much can I lose" but "how long can I wait".
This is where most damage is done. The investor who sells at the bottom converts a temporary paper loss into a permanent one, and then usually buys back higher. The fall itself costs nothing to someone who does not sell.
What to do with the number
Before you invest, look up the fund's worst historical drawdown and ask a blunt question: if this happened the month after I invested, would I hold? If the honest answer is no, you are in the wrong fund or the wrong asset entirely — and money you need within five years probably should not be in equity at all.
On every scheme page here we publish the worst drawdown we can compute from the fund's own NAV history, alongside how often it has lost money over rolling periods. Those two figures together tell you more about what you are signing up for than any return number will.
What to take away
- Drawdown is the worst peak-to-trough fall a fund has suffered.
- Expect 35–55% from a diversified equity fund at some point; more from small-caps.
- Recovery is asymmetric — a 40% fall needs a 67% gain to break even.
- Falls only become losses when you sell. Choose a fund you can hold through one.