Top Performing PSU Funds in 5 Years

The below table shows a list Of the Best PSU funds Based on AUM, NAV, and minimum SIP.

Introduction to Top Performing PSU Funds in 5 Years

Bandhan Banking & PSU Debt Fund

Bandhan Banking & PSU Debt Fund Direct-Growth is a Banking and PSU mutual fund scheme from Bandhan Mutual Fund. This fund has been in existence for 11 years and 6 months, having been launched on 26/02/2013.

Bandhan Banking & PSU Debt Fund Direct-Growth as a Government-owned company-focused fund, manages assets valued at ₹13887.95 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.79%. This fund has no exit load and an expense ratio of 0.33%. According to SEBI, it falls under the Moderate risk category. The fund’s asset allocation comprises: No Equity, Debt – 95.6%, and Other – 4.4%.

Axis Banking & PSU Debt Fund

Axis Banking & PSU Debt Direct Plan-Growth is a Banking and PSU mutual fund scheme from Axis Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Axis Banking & PSU Debt Direct Plan-Growth as a Government-owned company-focused fund, manages assets valued at ₹13282.68 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.48%. This fund has no exit load and an expense ratio of 0.35%. According to SEBI, it falls under the Moderate risk category. The fund’s asset allocation comprises: No Equity, Debt – 97.49%, and Other – 2.51%.

Aditya Birla SL Banking & PSU Debt Fund

Aditya Birla Sun Life Banking & PSU Debt Fund Direct-Growth is a Banking and PSU mutual fund scheme from Aditya Birla Sun Life Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Aditya Birla Sun Life Banking & PSU Debt Fund Direct-Growth, a Government-owned company-focused fund, manages assets valued at ₹9406.52 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.88%. This fund has no exit load and an expense ratio of 0.39%. According to SEBI, it falls under the Moderate risk category. The fund’s asset allocation comprises: No Equity, Debt – 95.48%, and Other – 4.52%.

ICICI Pru Banking & PSU Debt Fund

ICICI Prudential Banking & PSU Debt Direct-Growth is a Banking and PSU mutual fund scheme from ICICI Prudential Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

ICICI Prudential Banking & PSU Debt Direct-Growth as a Government-owned company-focused fund, manages assets valued at ₹9213.52 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 7.05%. This fund has no exit load and an expense ratio of 0.39%. According to SEBI, it falls under the Moderate risk category. The fund’s asset allocation comprises: No Equity, Debt – 96.45%, and Other – 3.55%.

HDFC Banking and PSU Debt Fund

HDFC Banking and PSU Debt Fund Direct-Growth is a Banking and PSU mutual fund scheme from HDFC Mutual Fund. This fund has been in existence for 10 years and 5 months, having been launched on 20/03/2014.

HDFC Banking and PSU Debt Fund Direct-Growth as a Government-owned company-focused fund, manages assets valued at ₹5919.26 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.93%. This fund has no exit load and an expense ratio of 0.39%. According to SEBI, it falls under the Moderate risk category. The fund’s asset allocation comprises: No Equity, Debt – 96.77%, and Other – 3.23%.

Kotak Banking and PSU Debt Fund

Kotak Banking and PSU Debt Fund Direct-Growth is a Banking and PSU mutual fund scheme from Kotak Mahindra Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

Kotak Banking and PSU Debt Fund Direct-Growth as a Government-owned company-focused fund, manages assets valued at ₹5728.32 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 7.01%. This fund has no exit load and an expense ratio of 0.39%. According to SEBI, it falls under the Moderate risk category. The fund’s asset allocation comprises: No Equity, Debt – 96.91%, and Other – 3.09%.

Nippon India Banking & PSU Debt Fund

Nippon India Banking & PSU Debt Fund Direct-Growth is a Banking and PSU mutual fund scheme from Nippon India Mutual Fund. This fund has been in existence for 9 years and 4 months, having been launched on 05/05/2015.

Nippon India Banking & PSU Debt Fund Direct-Growth as a Government-owned company-focused fund, manages assets valued at ₹5337.37 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.96%. This fund has no exit load and an expense ratio of 0.38%. According to SEBI, it falls under the Moderate risk category. The fund’s asset allocation comprises: No Equity, Debt – 96.04%, and Other – 3.97%.

HSBC Banking and PSU Debt Fund

HSBC Banking and PSU Debt Fund Direct-Growth is a Banking and PSU mutual fund scheme from HSBC Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

HSBC Banking and PSU Debt Fund Direct-Growth as a Government-owned company-focused fund, manages assets valued at ₹4802.31 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.17%. This fund has no exit load and an expense ratio of 0.23%. According to SEBI, it falls under the Moderate risk category. The fund’s asset allocation comprises: No Equity, Debt – 99.23%, and Other – 0.77%.

SBI Banking and PSU Fund

SBI Banking and PSU Fund Direct-Growth is a Banking and PSU mutual fund scheme from SBI Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.

SBI Banking and PSU Fund Direct-Growth as a Government-owned company-focused fund, manages assets valued at ₹3774.24 crore. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.49%. This fund has no exit load and an expense ratio of 0.34%. According to SEBI, it falls under the Moderate risk category. The fund’s asset allocation comprises: No Equity, Debt – 96.43%, and Other – 3.57%.

DSP Banking & PSU Debt Fund

DSP Banking & PSU Debt Fund Direct-Growth is a Banking and PSU mutual fund scheme from DSP Mutual Fund. This fund has been in existence for 11 years, having been launched on 10/09/2013.

DSP Banking & PSU Debt Fund Direct-Growth as a Government-owned company-focused fund, manages assets valued at ₹2533.14 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 6.75%. This fund has no exit load and an expense ratio of 0.32%. According to SEBI, it falls under the Moderate risk category. The fund’s asset allocation comprises: No Equity, Debt – 99.7%, and Other – 0.3%.

What Are PSU Funds?

PSU funds are mutual funds that primarily invest in Public Sector Undertakings (PSUs), which are government-owned corporations. These funds focus on stocks of companies with majority government ownership, aiming to provide stability and steady returns through these state-backed enterprises.

These funds offer investors exposure to a range of industries, such as energy, utilities, and banking, where PSUs are prominent. By investing in such diversified sectors, PSU funds help in spreading risk while capitalizing on the steady growth of government-backed entities.

PSU funds are often seen as a conservative investment option due to the stability provided by government backing. They can be an attractive choice for those seeking lower risk and reliable income through dividends, along with potential capital appreciation.

Features Of Top Performing PSU Funds in 5 Years

The main features of top-performing PSU funds over the past 5 years include consistent returns, strong dividend yields, diversified investments, and strategic management.

• Consistent Returns: Top PSU funds have demonstrated steady growth in returns, reflecting stability and reliability in their performance over the long term.
• Strong Dividend Yields: High dividend yields are a key feature, providing investors with regular income and showcasing the funds’ robust underlying assets and profitable operations.
• Diversified Investments: These funds typically invest across various sectors and companies, reducing risk and enhancing potential returns by not being overly reliant on a single asset or industry.
• Strategic Management: Effective management strategies, including timely rebalancing and selective stock picking, contribute to the funds’ ability to adapt to market changes and maximize returns.

Best Performing PSU Funds in 5 Years

The table below shows the Best-performing PSU funds Based on the highest to lowest expense ratio.

Top Performing PSU Funds in 5 Years In India

The table below shows the Best PSU funds Based on the Highest 3Y CAGR.

Top Performing PSU Funds in 5 Years List

The table below shows Best Performing PSU funds In India 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 5 Years

The main factors to consider when investing in top-performing PSU funds over the past 5 years include fund performance history, expense ratios, government policies, and sector stability.

• Fund Performance History: Assess the fund’s past performance to gauge its consistency and reliability. Historical returns provide insights into how the fund has managed market fluctuations and economic changes.
• Expense Ratios: Evaluate the fund’s expense ratios to understand the costs associated with investment. Lower expenses can enhance net returns, making it crucial to compare these ratios across different PSU funds.
• Government Policies: Consider the impact of government policies on PSU companies. Policies related to privatization, subsidies, and regulatory changes can significantly influence fund performance and sector stability.
• Sector Stability: Analyze the stability of the sectors in which the PSU fund invests. Stable and growing sectors are less likely to face volatility, contributing to more reliable fund performance over time.

How To Invest In Top Performing PSU Funds in 5 Years?

To invest in top-performing PSU funds over five years, start by researching funds with strong historical performance and stable returns. Look for funds that focus on government-owned enterprises with consistent growth and reliable cash flows.

Open an account with Alice Blue that offers access to a range of PSU funds. These platforms provide tools for comparing fund performance, reading manager reports, and executing trades, helping you make informed investment decisions.

Allocate your investment into the selected PSU funds based on your risk tolerance and financial goals. Regularly review your investments and adjust your portfolio as needed to ensure alignment with long-term objectives and market conditions.

Advantages Of Investing In Top Performing PSU Funds in 5 Years

The main advantages of investing in top-performing PSU funds over the past 5 years include stable returns, high dividend yields, government backing, and diversified portfolios.

• Stable Returns: Top-performing PSU funds often provide consistent returns, offering investors a reliable income stream and reduced volatility compared to more speculative investments.
• High Dividend Yields: These funds typically offer attractive dividend yields, providing regular income to investors and reflecting the financial health and profitability of the underlying PSU companies.
• Government Backing: Investments in PSU funds benefit from government support and intervention, which can provide a safety net during economic downturns and enhance the stability of the fund’s investments.
• Diversified Portfolios: PSU funds generally hold a diversified mix of stocks across various sectors, reducing risk and increasing the potential for balanced returns by not relying on a single industry or company.

Risks Of Investing In Top Performing PSU Funds in 5 Years

The main risks of investing in top-performing PSU funds over the past 5 years include political risk, sector-specific vulnerabilities, lower growth potential, and regulatory changes.

• Political Risk: PSU funds are susceptible to political changes and government policies, which can impact the performance of state-owned enterprises and create uncertainty for investors.
• Sector-Specific Vulnerabilities: These funds often concentrate in specific sectors like energy or utilities, making them vulnerable to sector-specific downturns and fluctuations, which can affect overall performance.
• Lower Growth Potential: PSU companies may have slower growth compared to private sector firms, which can limit the growth potential of the fund and affect long-term returns.
• Regulatory Changes: Changes in regulations and government policies can impact PSU companies’ operations and profitability, potentially leading to unexpected risks and volatility in the fund’s performance.

Importance of PSU Funds

PSU funds are important for investors seeking stability and lower risk, as they invest in government-owned enterprises with generally reliable cash flows and strong backing. These funds provide a conservative investment option with a focus on steady returns.

Additionally, PSU funds can offer diversification benefits by including stocks from various public sector industries. They often have lower volatility compared to private-sector investments, making them a suitable choice for those looking to balance their portfolio and reduce overall risk.

How Long to Stay Invested in PSU Mutual Funds?

It is advisable to stay invested in PSU mutual funds for at least 5 to 7 years to fully benefit from their potential stability and growth. This longer period allows for market fluctuations to smooth out and investment goals to be achieved.

PSU mutual funds often offer steady returns due to their focus on government-backed enterprises, but they may experience slower growth compared to private-sector funds. A long-term investment horizon helps in capitalizing on consistent performance and mitigating short-term market volatility.

Tax Implications of Investing in PSU Mutual Funds

Investing in PSU mutual funds can lead to capital gains tax on profits when you sell shares. Long-term capital gains, from investments held over a year, are typically taxed at a lower rate than short-term gains from holdings of one year or less.

Dividends received from PSU mutual funds are subject to income tax based on your tax bracket. It’s important to understand these tax implications to optimize your investment strategy and manage tax liabilities effectively, potentially using tax-saving investment options if available.

Future of PSU Mutual Funds

The future of PSU mutual funds looks stable due to the consistent support and backing of government-owned enterprises. As these companies often have reliable cash flows and lower volatility, PSU funds may offer steady returns and attract conservative investors.

However, PSU funds might face challenges from slower growth compared to private-sector companies and potential political or policy changes. Adapting to evolving market conditions and regulatory environments will be essential for maintaining performance and meeting investor expectations in the long term.

Top Performing PSU Funds in 5 Years – 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.