Maximum drawdown by fund category — and why large caps look worse than small caps
Maximum drawdown is not a rate. It's a record — and older funds have had more chances to set one.
Maximum drawdown — the worst peak-to-trough fall in a fund's history — is the risk number investors most often ask for and least often find tabulated. Here it is across our universe, with one result that looks wrong until you see why it isn't.
By category group
| Group | Funds | Median max drawdown | Worst in group |
|---|---|---|---|
| Equity | 627 | −25.93% | −63.08% |
| FoF | 202 | −23.98% | −54.38% |
| Index/ETF | 365 | −16.31% | −46.85% |
| Hybrid | 168 | −11.72% | −42.35% |
| Debt | 405 | −1.75% | −99.00% |
The ordering is unsurprising. The median equity fund has at some point fallen about a quarter from a peak; the median debt fund under two percent.
The result that looks wrong
| Category | Funds | Median max drawdown | Median history |
|---|---|---|---|
| Large Cap Fund | 32 | −34.88% | ~9.9 years |
| Small Cap Fund | 34 | −29.77% | ~6.3 years |
| Sectoral / Thematic | 58 | −21.92% | — |
Large-cap funds show a deeper median drawdown than small-cap funds. Read as a risk ranking that is obviously backwards — small caps are the more volatile category by every other measure.
The explanation is in the last column. Maximum drawdown is not a rate; it is a record. It reports the worst thing that has happened so far, so a fund with more history has had more chances to record something bad.
The median large-cap fund here carries about ten years of NAV history and therefore lived through the March 2020 crash. The median small-cap fund carries about six, and many launched after it. The large-cap number includes an event the small-cap number mostly doesn't.
The rule this implies
Never compare maximum drawdown between funds with different history lengths. A shallow drawdown on a three-year-old fund means it hasn't seen a crisis, not that it would survive one well.
Two debt numbers that aren't real
The debt group's worst drawdown reads −99.00%, on a liquid fund. A second liquid fund shows −90.00%. Neither happened.
Liquid funds hold very short-dated instruments and move by fractions of a percent daily. A 99% single -period fall is not a market event; it is a bad NAV data point in the published series, of exactly the kind we cover in our data quality guide. We flag these rather than silently deleting them, because a scrubbing rule aggressive enough to remove them can also remove real credit events.
Which matters, because some large debt drawdowns in that table are real — credit risk funds have genuinely experienced severe falls. Distinguishing a genuine credit event from a data glitch cannot be done on the size of the fall alone.
What drawdown does and doesn't tell you
It tells you the worst outcome recorded so far, on this fund, over its history. It does not tell you the worst possible outcome, the likelihood of a repeat, or how long recovery took — and a fund can have a modest maximum drawdown and still have spent years underwater.
Read alongside history length and volatility, it's informative. Read alone as a risk score, it systematically favours funds that haven't been around long enough to be tested.
Key takeaways
- Median max drawdown: equity −25.9%, hybrid −11.7%, debt −1.8%.
- Large-cap funds show deeper median drawdowns than small caps — because they have ~10 years of history vs ~6.
- Never compare drawdown between funds with different history lengths.
- Two liquid funds show −99% and −90% drawdowns; both are NAV data glitches, not events.
- Some large debt drawdowns are real credit events — size alone can't tell them apart from glitches.
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Browse today's scan →This guide reports measured statistics from public AMFI NAV data for a single date. Fund and category names appear only to illustrate a measurement effect and are not recommendations. Past performance does not indicate future results. This is not investment advice.