Max Drawdown: How Far Can This Fund Fall?

Returns tell you the reward. Maximum drawdown tells you the pain. It's the largest peak-to-trough fall a fund has ever had.

Why it's the risk number that matters Volatility is abstract; a drawdown is visceral. If a fund's max drawdown is -55%, it means ₹1 lakh once became ₹45,000. Could you hold through that without panic-selling? That's the real question.

How to use it - Compare a fund's max drawdown to its category. A small-cap falling 55% is normal; a large-cap falling 55% is a red flag. - Pair it with downside capture — how much of the market's falls the fund absorbed. - A fund that falls less in bad markets is easier to hold, which means you're more likely to stay invested and actually capture the long-term returns.

The behavioural point The best fund is the one you won't abandon at the bottom. Lower drawdowns aren't just about safety — they're about staying the course.

Downside protection is one of our six FundScore factors. See max drawdown on every scored fund page.