Top Performing PSU Funds in 1 Year

The table below shows Top Performing PSU Funds in 1 Year based on AUM, NAV, and Minimum SIP.

Introduction to Top Performing PSU Funds in 1 Year

Aditya Birla SL PSU Equity Fund

Aditya Birla SL PSU Equity Fund, Category: Thematic Fund, having AUM of ₹5121.77 Crore,  exit load: 1%, and an expense ratio of 0.43%.

Aditya Birla Sun Life PSU Equity Fund Direct Growth is an Equity Mutual Fund Scheme launched by Aditya Birla Sun Life Mutual Fund. This scheme was made available to investors on 23 Dec 1994. The fund’s asset allocation comprises 95.1% in equity investments and 4.9% held in cash, reflecting a strong focus on equity with a small portion reserved for liquidity purposes.

SBI PSU Fund

SBI PSU Fund, Category: Thematic Fund, having AUM of ₹3694.68 Crore, 5Y CAGR: 31.43%, exit load: 0.5%, and an expense ratio of 0.73%.

SBI PSU Direct Plan-Growth is an Equity Mutual Fund Scheme launched by SBI Mutual Fund. This scheme was made available to investors on 29 Jun 1987. The fund’s asset allocation comprises 92.1% in equity investments and 7.9% held in cash, reflecting a strong focus on equity with a small portion reserved for liquidity purposes.

ICICI Pru PSU Equity Fund

ICICI Pru PSU Equity Fund, Category: Thematic Fund, having AUM of ₹2643.41 Crore,  exit load: 1%, and an expense ratio of 0.62%.

ICICI Prudential PSU Equity Fund Direct Growth is an Equity Mutual Fund Scheme launched by ICICI Prudential Mutual Fund. This scheme was made available to investors on 12 Oct 1993. The fund’s asset allocation includes 87.1% in equity, 12% in cash, and 0.9% in debt, emphasizing a heavy investment in equities with a smaller portion allocated to liquidity and fixed income.

Invesco India PSU Equity Fund

Invesco India PSU Equity Fund, Category: Thematic Fund, having AUM of ₹1663.11 Crore, 5Y CAGR: 35.00%, exit load: 1%, and an expense ratio of 0.77%.

Invesco India PSU Equity Fund Direct-Growth is an Equity Mutual Fund Scheme launched by Invesco Mutual Fund. This scheme was made available to investors on 24 Jul 2006. The fund’s asset allocation consists of 97.5% in equity and 2.5% in cash, demonstrating a strong focus on equities with a small allocation for liquidity.

Quant PSU Fund

Quant PSU Fund, Category: Thematic Fund, having AUM of ₹1065.79 Crore,  exit load: 1%, and an expense ratio of 0.83%.

Quant PSU Fund Direct Growth is an Equity Mutual Fund Scheme launched by Quant Mutual Fund. This scheme was made available to investors on 15 Apr 1996. The fund allocates 99% to equity and 1% to debt, showing a dominant equity exposure with minimal investment in fixed income.

Kotak BSE PSU Index Fund

Kotak BSE PSU Index Fund, Category: Index Fund, having AUM of ₹73.25 Crore,  exit load: 0%, and an expense ratio of 0%.

Kotak BSE PSU Index Fund Direct-Growth is an Equity Mutual Fund Scheme launched by Kotak Mahindra Mutual Fund. This scheme was made available to investors on 05 Aug 1994. The fund’s asset allocation is 99.8% in equity and 0.2% in cash, reflecting a nearly complete focus on equities with a negligible cash reserve.

What Are PSU Funds?

PSU Funds are mutual funds that invest primarily in public sector undertakings (PSUs), which are companies where the government holds a majority stake. These funds aim to benefit from the stability and growth of government-backed enterprises.

Features Of Top Performing PSU Funds in 1 Year

The main features of top-performing PSU funds in 1 year include consistent returns, stable government backing, low volatility, and diversified investments across various public sector industries.

• Consistent Returns:

Top-performing PSU funds often deliver stable returns as they invest in government-backed companies, reducing risks associated with market volatility and ensuring steady performance over time.

• Stable Government Backing:

PSUs are backed by the government, ensuring financial stability and reducing the risk of defaults. This makes PSU funds attractive to risk-averse investors seeking security in their investments.

• Low Volatility:

Investments in PSUs tend to be less volatile compared to private-sector funds, making PSU mutual funds ideal for conservative investors who prefer consistent returns over high risk and high reward.

• Diversified Investments:

PSU funds invest across various sectors such as energy, banking, and infrastructure, providing diversification and reducing exposure to sector-specific risks while ensuring balanced growth across industries.

Best Performing PSU Funds in 1 Year

The table below shows the Best Performing PSU Funds in 1 Year based on Expense Ratio and Minimum SIP.

Top Performing PSU Funds In 1 Year India

The table below shows the top-performing PSU Funds in 1 Year India based on CAGR 3Y and Minimum SIP.

Top Performing PSU Funds in 1 Year List 

The table below shows the Top Performing PSU Funds in the 1 Year List based on Exit Load and AMC.

How to Choose The Top Performing PSU Funds in 1 Year

To choose the top-performing PSU funds, analyze the fund’s past performance, focusing on its 1-year returns, expense ratio, and risk-adjusted returns. Review the fund manager’s experience and investment strategy to ensure alignment with your financial goals.

Additionally, assess the portfolio composition, ensuring it includes diversified PSU investments across different sectors. This helps in balancing risk while maximizing returns, providing a stable investment strategy.

How To Invest In Top Performing PSU Funds in 1 Year?

To invest in top-performing PSU funds, open a demat or mutual fund account with a broker, and research the top funds based on their 1-year performance. Ensure the fund aligns with your financial goals and risk appetite.

Once identified, place your investment through the broker’s platform and set up a systematic investment plan (SIP) if preferred. Regularly monitor the fund’s performance to ensure it meets your objectives.

Advantages Of Top Performing PSU Funds in 1 Year

The main advantages of top-performing PSU funds in 1 year include steady returns, government-backed security, low-risk exposure, and strong dividend potential, making them appealing for conservative investors seeking stable investments.

• Steady Returns:

PSU funds often deliver reliable returns due to government-backed enterprises’ stable earnings, making them a safe choice for investors looking for consistent income in the short term.

• Government-Backed Security:

Investing in PSUs offers the added security of government ownership, which provides financial stability and minimizes the risk of insolvency, offering a safer investment environment.

• Low-Risk Exposure:

These funds typically have low-risk exposure, as PSUs operate in essential sectors like energy and banking, which are less affected by market volatility and economic downturns.

• Strong Dividend Potential:

Many PSUs offer regular dividend payouts due to their consistent cash flows. This makes PSU funds attractive for income-seeking investors, providing steady dividend income alongside capital appreciation.

Disadvantages of Top Performing PSU Funds in 1 Year

The main disadvantages of top-performing PSU funds in 1 year include limited growth potential, regulatory risks, sector concentration, and lower returns compared to private sector funds.

• Limited Growth Potential:

PSUs may offer stable returns but often lack the aggressive growth seen in private sector companies, limiting the potential for capital appreciation, especially in fast-growing markets.

• Regulatory Risks:

PSU funds are subject to regulatory changes and government decisions, which can impact their operations and profitability, making these funds susceptible to policy risks that can affect performance.

• Sector Concentration:

Many PSU funds have significant exposure to sectors like energy or banking, increasing the risk of sector-specific downturns. This concentration limits diversification and can lead to underperformance during sectoral slowdowns.

• Lower Returns:

PSU funds typically offer lower returns compared to growth-oriented private sector funds. While they provide stability, their conservative nature may not align with investors seeking high-growth opportunities.

Importance of PSU Funds

The main importance of PSU funds lies in their ability to offer stable returns, government-backed security, and low-risk investments, making them a key component of a conservative investment strategy.

• Stable Returns:

PSU funds offer consistent returns due to the stability of government-backed enterprises. This makes them attractive for investors seeking reliable performance over the long term, especially in volatile markets.

• Government Security:

PSU funds invest in public sector enterprises, which are supported by the government. This backing provides an additional layer of security, ensuring financial stability and reducing the risk of losses.

• Essential Sectors:

PSUs operate in crucial sectors like energy, infrastructure, and banking, providing essential services to the economy. Investing in these sectors ensures steady demand, leading to more predictable returns.

• Diversification:

PSU funds invest across multiple sectors, reducing risk exposure to any single industry. This diversification helps investors balance their portfolios while gaining exposure to stable, government-backed enterprises.

How Long to Stay Invested in PSU Mutual Funds?

Investing in PSU mutual funds for the long term, typically 3-5 years, helps maximize returns. These funds benefit from government backing, sector stability, and regular dividends, making long-term holding a better strategy for stable returns.

Short-term investments might not capture the full potential of PSU stocks, which often require time to grow and perform, especially during periods of economic recovery or government policy shifts.

Tax Implications of Investing in PSU Funds

PSU mutual funds held for over three years are subject to long-term capital gains (LTCG) tax with indexation benefits, reducing the overall tax burden on the investor, and making long-term holding more tax-efficient.

Short-term gains (held for less than three years) are taxed according to the investor’s income tax slab. Dividends received from these funds are also taxable at the individual’s applicable tax rate.

Why PSU Mutual Funds Are Losing Momentum in 2024

PSU mutual funds are losing momentum in 2024 due to lower growth prospects, increased competition from private sector companies, and regulatory uncertainties that impact investor confidence in government-backed enterprises.

Moreover, the shift towards technology-driven sectors and higher-growth opportunities in private equities has diverted investor attention away from PSU stocks, reducing demand for PSU funds.

Future of PSU Funds

The future of PSU funds depends on government policies and reforms aimed at revitalizing public sector undertakings. Strategic investments and divestments could help enhance their performance, making these funds attractive again.

However, with rising competition from private sectors and market-driven industries, PSU funds will need to adapt to modern challenges to stay relevant and competitive in the evolving market landscape.

Top Performing PSU Funds in 1 Year in India – FAQs 

Disclaimer: The above article is written for educational purposes, and the companies’ data mentioned in the article may change with respect to time The securities quoted are exemplary and are not recommendatory.