Top Performing PSU Funds in 10 Years

The below table shows a list Of the top-performing PSU Funds in 10 Years Based on AUM, NAV and minimum SIP.

Introduction to Top Performing PSU Funds in 10 Years

Bandhan Banking & PSU Debt Fund

Bandhan Banking & PSU Debt Fund is a Banking and PSU mutual fund scheme from Bandhan Mutual Fund. This fund has been operational for 11 years and 6 months, having been launched on February 26, 2013.

Bandhan Banking & PSU Debt Fund falls under the Banking & PSU Fund category with an AUM of ₹14,211.17 crores, a 5-year CAGR of 6.82%, no exit load and an expense ratio of 0.33%. The SEBI risk category is Moderate. Its asset allocation includes 61.58% in Corporate Debt, 21.13% in Government Securities, 12.58% in Certificate of Deposit, 4.44% in Cash & Equivalents and 0.27% in Others.

Aditya Birla Sun Life Banking & PSU Debt Fund

Aditya Birla Sun Life Banking & PSU Debt Fund is a Banking and PSU mutual fund scheme from Aditya Birla Sun Life Mutual Fund. This fund has been operational for 11 years and 8 months, having been launched on January 1, 2013.

Aditya Birla Sun Life Banking & PSU Debt Fund falls under the Banking & PSU Fund category with an AUM of ₹9,396.96 crores, a 5-year CAGR of 6.87%, no exit load and an expense ratio of 0.39%. The SEBI risk category is Moderate. Its asset allocation includes 70.36% in Corporate Debt, 19.44% in Government Securities, 4.89% in Certificate of Deposit, 0.53% in Cash & Equivalents, 0.26% in Floating-rate Debt and Others.

ICICI Prudential Banking & PSU Debt Fund

ICICI Prudential Banking & PSU Debt Fund is a Banking and PSU mutual fund scheme from ICICI Prudential Mutual Fund. This fund has been operational for 11 years and 8 months, having been launched on January 1, 2013.

ICICI Prudential Banking & PSU Debt Fund falls under the Banking & PSU Fund category with an AUM of ₹9,213.52 crores, a 5-year CAGR of 7.07%, no exit load and an expense ratio of 0.39%. The SEBI risk category is Moderate. Its asset allocation includes 74.80% in Corporate Debt, 19.05% in Government Securities, 3.55% in Certificate of Deposit, 2.35% in Cash & Equivalents and 0.25% in Others.

HDFC Banking & PSU Debt Fund

HDFC Banking & PSU Debt Fund is a Banking and PSU mutual fund scheme from HDFC Mutual Fund. This fund has been operational for 9 years and 6 months, having been launched on March 26, 2014.

HDFC Banking & PSU Debt Fund falls under the Banking & PSU Fund category with an AUM of ₹5,963.48 crores, a 5-year CAGR of 6.97%, no exit load and an expense ratio of 0.39%. The SEBI risk category is Moderate. Its asset allocation includes 79.45% in Corporate Debt, 16.62% in Government Securities, 3.26% in Certificate of Deposit, 0.41% in Cash & Equivalents and 0.27% in Others.

Kotak Banking & PSU Debt Fund

Kotak Banking & PSU Debt Fund is a Banking and PSU mutual fund scheme from Kotak Mahindra Mutual Fund. This fund has been operational for 11 years and 8 months, having been launched on January 1, 2013.

Kotak Banking & PSU Debt Fund falls under the Banking & PSU Fund category with an AUM of ₹5,728.32 crores, a 5-year CAGR of 7.03%, no exit load and an expense ratio of 0.39%. The SEBI risk category is Moderate. Its asset allocation includes 71.59% in Corporate Debt, 25.01% in Government Securities, 3.13% in Cash & Equivalents and 0.27% in Others.

Nippon India Banking & PSU Debt Fund

Nippon India Banking & PSU Debt Fund is a Banking and PSU mutual fund scheme from Nippon India Mutual Fund. This fund has been operational for 9 years and 4 months, having been launched on May 5, 2015.

Nippon India Banking & PSU Debt Fund falls under the Banking & PSU Fund category with an AUM of ₹5,345.36 crores, a 5-year CAGR of 6.98%, no exit load and an expense ratio of 0.38%. The SEBI risk category is Moderate. Its asset allocation includes 70.38% in Corporate Debt, 22.38% in Government Securities, 1.51% in Cash & Equivalents, 1.39% in Floating-rate Debt and 0.36% in Certificate of Deposit and Others.

DSP Banking & PSU Debt Fund

DSP Banking & PSU Debt Fund is a Banking and PSU mutual fund scheme from DSP Mutual Fund. This fund has been operational for 10 years and 11 months, having been launched on September 10, 2013.

DSP Banking & PSU Debt Fund falls under the Banking & PSU Fund category with an AUM of ₹2,427.49 crores, a 5-year CAGR of 6.73%, no exit load and an expense ratio of 0.32%. The SEBI risk category is Moderate. Its asset allocation includes 71.56% in Corporate Debt, 23.06% in Government Securities, 4.82% in Certificate of Deposit, 0.30% in Cash & Equivalents and 0.26% in Others.

UTI Banking & PSU Debt Fund

UTI Banking & PSU Debt Fund is a Banking and PSU mutual fund scheme from UTI Mutual Fund. This fund has been operational for 10 years and 7 months, having been launched on January 27, 2014.

UTI Banking & PSU Debt Fund falls under the Banking & PSU Fund category with an AUM of ₹841 crores, a 5-year CAGR of 7.10%, no exit load and an expense ratio of 0.36%. The SEBI risk category is Moderate. Its asset allocation includes 73.86% in Corporate Debt, 22.06% in Government Securities, 3.79% in Cash & Equivalents and 0.29% in Others.

Franklin India Banking & PSU Debt Fund

Franklin India Banking & PSU Debt Fund is a Banking and PSU mutual fund scheme from Franklin Templeton Mutual Fund. This fund has been operational for 10 years and 5 months, having been launched on April 2, 2014.

Franklin India Banking & PSU Debt Fund falls under the Banking & PSU Fund category with an AUM of ₹609.98 crores, a 5-year CAGR of 6.57%, no exit load and an expense ratio of 0.18%. The SEBI risk category is Moderate. Its asset allocation includes 79.91% in Corporate Debt, 11.39% in Government Securities, 8.39% in Cash & Equivalents and 0.31% in Others.

Edelweiss Banking & PSU Debt Fund

Edelweiss Banking & PSU Debt Fund is a Banking and PSU mutual fund scheme from Edelweiss Mutual Fund. This fund has been operational for 11 years, having been launched on August 26, 2013.

Edelweiss Banking & PSU Debt Fund falls under the Banking & PSU Fund category with an AUM of ₹274.97 crores, a 5-year CAGR of 7.25%, no exit load and an expense ratio of 0.39%. The SEBI risk category is Moderate. Its asset allocation includes 83.18% in Corporate Debt, 11.19% in Government Securities, 5.29% in Cash & Equivalents and 0.34% in Others.

What Are PSU Funds?

PSU (Public Sector Undertaking) Funds are mutual funds that primarily invest in stocks of government-owned companies or public sector enterprises. These funds aim to capitalize on the growth and performance of state-owned businesses, which often play crucial roles in various sectors of the Indian economy.

PSU Funds typically invest in a diversified portfolio of public sector companies across sectors such as energy, banking, metals and infrastructure. They offer investors exposure to companies that often have strategic importance and government backing.

These funds can be attractive to investors who believe in the long-term growth potential of government-owned enterprises and want to benefit from their performance. PSU Funds also often provide exposure to companies with strong dividend yields.

Features Of Top Performing PSU Funds in 10 Years

The main features of Top Performing PSU Funds in 10 Years include consistent long-term returns, exposure to strategic sectors, the potential for high dividend yields, government backing of underlying companies and professional fund management. These funds have demonstrated strong performance over an extended period.

• Consistent Returns: These funds have shown the ability to generate steady returns over 10 years, often outperforming broader market indices.

• Strategic Sector Exposure: PSU Funds provide exposure to key sectors of the economy that are often dominated by government-owned enterprises.

• High Dividend Potential: Many PSUs are known for their high dividend payouts, potentially offering attractive dividend yields to investors.

• Government Backing: The underlying companies in these funds often have implicit or explicit government support, potentially reducing risk.

• Professional Management: Top-performing PSU Funds are managed by experienced fund managers with deep knowledge of the public sector landscape.

Best Performing PSU Funds in 10 Years

The table below shows the Best-performing PSU Funds in 10 Years Based on the lowest to highest expense ratio.

Top Performing PSU Funds in 10 Years In India

The table below shows the top-performing PSU Funds in 10 Years In India Based on the Highest 3Y CAGR.

Top Performing PSU Funds in 10 Years List 

The table below shows the Top Performing PSU Funds in the 10 Years List based on exit load, i.e., the fee that the AMC charges investors when they exit or redeem their fund units.

Factors To Consider When Investing In Top Performing PSU Funds in 10 Years

The main factors to consider when investing in top-performing PSU Funds in 10 Years include historical performance, sector allocation, dividend yield, government policies and fund manager expertise. These factors can significantly impact the fund’s performance and suitability for your investment portfolio.

• Historical Performance: Evaluate the fund’s performance over different market cycles, comparing it with both its benchmark and peer funds over the 10 years.

• Sector Allocation: Assess the fund’s allocation across different sectors to ensure it aligns with your investment strategy and risk tolerance.

• Dividend Yield: Consider the fund’s dividend yield, as many PSU companies are known for their high dividend payouts.

• Government Policies: Stay informed about government policies that may impact PSUs, as these can significantly affect the fund’s performance.

• Fund Manager Expertise: Research the fund manager’s experience and track record in managing PSU-focused portfolios over long periods.

How To Invest In Top-Performing PSU Funds in 10 Years?

To invest in Top Performing PSU Funds in 10 Years, start by researching funds with a strong long-term track record. Consider factors like consistent performance, sector allocation and dividend yield. Determine the amount you wish to invest based on your financial goals and risk tolerance.

Open an account with Alice Blue. Complete the necessary KYC (Know Your Customer) procedures. Choose your preferred PSU Fund and decide whether you want to invest via lump sum or through a Systematic Investment Plan (SIP).

If opting for SIP, set up automatic transfers from your bank account. This can help you benefit from rupee cost averaging. Regularly review your investment’s performance and consider rebalancing your portfolio if needed. Stay invested for the long term to potentially benefit from compounding returns.

Advantages Of Investing In Top Performing PSU Funds in 10 Years

The main advantages of investing in top-performing PSU Funds in 10 Years include exposure to strategic sectors, potential for high dividend yields, government backing, professional management and demonstrated long-term performance. These funds offer a unique investment proposition in the Indian market.

• Strategic Sector Exposure: PSU Funds provide access to key sectors of the economy that are often dominated by government-owned enterprises.

• High Dividend Potential: Many PSUs are known for their high dividend payouts, potentially offering attractive regular income to investors.

• Government Backing: The underlying companies often have implicit or explicit government support, which can provide a level of stability.

• Professional Management: Experienced fund managers leverage their expertise in navigating the public sector landscape to optimize returns.

• Proven Track Record: Top-performing funds in this category have demonstrated the ability to generate consistent returns over 10 years.

Risks Of Investing In Top Performing PSU Funds in 10 Years

The main risks of investing in top-performing PSU Funds in 10 Years include policy risks, sector concentration risks, market risk, potential for underperformance and liquidity concerns. Investors should be aware of these risks before allocating funds to PSU-focused investments.

• Policy Risk: Changes in government policies can significantly impact PSUs and, consequently, the performance of these funds.

• Sector Concentration: PSU Funds may have higher exposure to certain sectors, potentially increasing risk if these sectors underperform.

• Market Risk: Like all equity investments, PSU Funds are subject to market volatility and can experience significant fluctuations in value.

• Underperformance Risk: There’s potential for underperformance if PSUs lose competitive edge or face operational inefficiencies.

• Liquidity Concerns: Some PSU stocks may have lower trading volumes, potentially affecting the fund’s ability to buy or sell at desired prices.

Importance of PSU Funds

The main importance of PSU Funds lies in their ability to provide exposure to strategic sectors, offer potential for high dividend yields, benefit from government backing, contribute to portfolio diversification and participate in the growth of government-led initiatives.

• Strategic Sector Exposure: PSU Funds offer access to key sectors of the economy that are often dominated by government-owned enterprises.

• Dividend Potential: Many PSUs are known for their high dividend payouts, making these funds attractive for income-seeking investors.

• Government Backing: The implicit or explicit government support for PSUs can provide a level of stability to these investments.

• Portfolio Diversification: Including PSU Funds can help diversify an investment portfolio, potentially reducing overall risk.

• Participation in Government Initiatives: These funds allow investors to potentially benefit from government-led growth and development initiatives.

How Long to Stay Invested in PSU Funds?

Investors should generally consider staying invested in PSU Funds for a long-term horizon, typically 5-7 years or more. This extended investment period allows time for the funds to navigate through various market cycles and potentially deliver optimal returns.

A longer investment horizon also aligns with the often strategic and long-term nature of PSU operations. It gives time for government policies and initiatives to potentially bear fruit and reflect in the performance of PSU stocks.

Tax Implications of Investing in PSU Funds

Investments in PSU Funds are subject to capital gains tax. For holdings less than one year, short-term capital gains are taxed at 15%. For holdings over one year, long-term capital gains up to ₹1 lakh per year are tax-free, while gains above this threshold are taxed at 10% without indexation benefit.

Dividends received from PSU Funds are taxable in the hands of investors at their applicable income tax slab rates. It’s advisable to consult a tax professional for personalized advice based on your specific financial situation and the latest tax regulations.

Future of PSU Funds

The future of PSU Funds in India looks promising, driven by ongoing government initiatives for public sector reforms and disinvestment plans. These funds may benefit from potential improvements in PSU efficiencies and profitability. However, their performance will likely be influenced by government policies and broader economic conditions.

As India’s economy evolves, PSU Funds may continue to offer opportunities for investors seeking exposure to strategic sectors and government-backed enterprises. However, investors should stay informed about policy changes and sector-specific developments that could impact these funds.

Top Performing PSU Funds in 10 Years AQs  

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.