New Delhi, Aug. 9 -- The performance of mutual funds weakened significantly in FY26, with the number of schemes reporting negative annual returns nearly tripling from the previous financial year, according to data in the Securities and Exchange Board of India's (SEBI) annual report for 2025-26.

The number of schemes generating negative returns rose to 731 in FY26 from 243 in FY25. At the same time, the number of schemes delivering returns of more than 5% fell sharply to 737 from 1,156 in FY26.

"The distribution of mutual fund schemes reflected subdued market performance during 2025-26," the SEBI annual report noted.

Schemes reporting returns of -10% or lower increased more than threefold, from 30 in FY25 to 93 in FY26. Meanwhile, the n...