Falls less than it rises: 74 funds, 29 pharma or hybrid

What the screen asks for

The falls less than it rises screen, in the screener's Risk-adjusted returns group, has a two-part rule:

• upside capture above 95%, and
• downside capture below 85%.

Upside capture takes the months in which a fund's benchmark rose and compares the fund's average return in those months with the benchmark's. Downside capture does the same for the falling months. These use the 36 complete months to September 2026, geometric averages, and each fund's own benchmark. A fund needs at least 30 of those months, and we only publish capture figures where the fund moves at least loosely with its benchmark, an R-squared of 0.2 or more.

The page adds Direct plans only, Growth option, and leaves out ETFs. It ranks the funds that pass by three-year CAGR, since capture is not a ranking field, and so lists only those with three years of NAVs.

Why the pairing works: losses cost more than gains give back. If an index rises 10% one month and falls 10% the next, it ends 1% down. A fund that caught 95% of the rise and 85% of the fall would be up 9.5% and then down 8.5%, ending 0.19% up. Over many months, that asymmetry compounds.

How many pass

744 Direct funds outside ETFs have both capture figures. 483 caught more than 95% of the up months and 227 less than 85% of the down months. 74 did both, as of NAVs to 9 October 2026; 66 of them have a three-year CAGR and appear in the ranked list.

The top ten by three-year CAGR:

What fills the list

Hybrid funds, 15. Eleven aggressive hybrid funds, three multi-asset funds and one dynamic asset allocation fund, all measured against the Nifty 50 TRI. An aggressive hybrid keeps 65% to 80% in shares and the rest mostly in bonds, so a low downside capture is close to built in. The test is the upside, and 11 of the 28 aggressive hybrids with capture figures kept above 95% of it. The largest is ICICI Prudential Aggressive Hybrid, ₹52,108 crore, at 96.6 up and 59.8 down.

Pharma and healthcare funds, 14. That is 14 of the 15 with capture figures. Their average is 114.2 up and 56.2 down, against the Nifty 500 TRI. Our post on pharma and healthcare funds covers their year.

Other sector funds, 21: ten banking and financial services funds and 11 other thematic funds. Then seven of the 27 small-cap funds, and a scattering of the rest.

Where the diversified funds are

Of 97 large cap, mid cap and flexi cap funds with capture figures, three pass:

HDFC Focused (99.6 up, 73.6 down) and ICICI Prudential Multi Cap (106.6, 83.2) are two of the larger diversified funds that also pass.

Why the list looks like this

A capture ratio is relative. It says how a fund moved compared with one particular index, and the screen takes that index as given.

When the fit is close, a low downside capture means the manager lost less than the market in its bad months. The small-cap funds that pass have R² near 0.9 against the Nifty Smallcap 250 TRI, so their numbers mean roughly that.

When the fit is loose, the ratio mixes skill with mismatch. A pharma fund judged against the Nifty 500 TRI (average R² 0.50 for those that pass) falls less in the index's bad months partly because pharma had different bad months. A hybrid falls less partly because a fifth to a third of it is outside shares. And the top fund in the table, a feeder into 50 large US companies, has an R² of only 0.26 against the S&P 500 in rupees, so its 125.5 and 34.0 say little.

That is why each fund page shows R² beside the capture figures, as a percentage, so 0.50 reads as 50%. Our earlier post on upside and downside capture by category compares averages for diversified categories, where the fit is better.

How to read it

Check R² first. When it is low, as it is for the pharma funds here at around 0.5, a capture ratio describes a fund unlike its index more than it grades the manager.

Thirty-six months is one stretch. This window holds the falls of late 2024 to early 2025 and of 2026. A different three years could reorder the list.

Capture is not return. A fund can catch 100% of the up months and still trail over time if its down months are worse; our guide to risk-adjusted returns shows how capture sits beside Sharpe and Sortino.

The list changes. The screen reruns on each day's NAVs and the capture window rolls forward a month at a time.

These are past figures from NAV histories. A screen narrows the field; it does not pick funds, and none of this is a recommendation to buy or sell.