Best PSU Mutual Fund

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

Name	AUM (Cr)	NAV (Rs)	Minimum SIP (Rs)
Bandhan Banking & PSU Debt Fund	14211.17	23.63	100
Axis Banking & PSU Debt Fund	13679.12	2529.71	100
Aditya Birla SL Banking & PSU Debt	9396.96	354.05	1000
ICICI Pru Banking & PSU Debt Fund	9213.52	31.77	100
HDFC Banking and PSU Debt Fund	5963.48	22.28	1500
Kotak Banking and PSU Debt Fund	5728.32	63.37	100
Nippon India Banking & PSU Debt Fund	5345.36	20.03	100
HSBC Banking and PSU Debt Fund	4802.31	23.78	500
SBI Banking and PSU Fund	3883.75	3079.68	1000
DSP Banking & PSU Debt Fund	2427.49	23.23	100

Introduction to PSU Mutual Fund

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 in existence for 11 years and 6 months, having been launched on February 26, 2013.

Bandhan Banking & PSU Debt Fund Category: Banking & PSU Fund with AUM of ₹14,211.17 Crores. It has a 5-year CAGR of 6.82%, an exit load of 0% and an expense ratio of 0.33%. SEBI categorizes its risk as Moderate. The fund’s asset allocation includes Cash & Equivalents at 0.27%, Certificate of Deposit at 4.44%, Government Securities at 12.58%, Corporate Debt at 21.13% and others at 61.58%.

Axis Banking & PSU Debt Fund

Axis Banking & PSU Debt Fund 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 January 1, 2013.

Axis Banking & PSU Debt Fund Category: Banking & PSU Fund with AUM of ₹13,679.12 Crores. It has a 5-year CAGR of 6.50%, an exit load of 0% and an expense ratio of 0.35%. SEBI categorizes its risk as Moderate. The fund’s asset allocation includes Certificate of Deposit at 0.27%, Cash & Equivalents at 0.52%, Government Securities at 3.90% and Corporate Debt at 80.93%.

Aditya Birla SL Banking & PSU Debt Fund

Aditya Birla SL Banking & PSU Debt Fund 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 January 1, 2013.

Aditya Birla SL Banking & PSU Debt Fund Category: Banking & PSU Fund with AUM of ₹9,396.96 Crores. It has a 5-year CAGR of 6.87%, an exit load of 0% and an expense ratio of 0.39%. SEBI categorizes its risk as Moderate. The fund’s asset allocation includes Floating-rate Debt at 0.26%, Cash & Equivalents at 0.53%, Certificate of Deposit at 4.52%, Government Securities at 4.89% and Corporate Debt at 70.36%.

ICICI Pru Banking & PSU Debt Fund

ICICI Pru Banking & PSU Debt Fund 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 January 1, 2013.

ICICI Pru Banking & PSU Debt Fund Category: Banking & PSU Fund with AUM of ₹9,213.52 Crores. It has a 5-year CAGR of 7.07%, an exit load of 0%, and an expense ratio of 0.39%. SEBI categorizes its risk as Moderate. The fund’s asset allocation includes Certificate of Deposit at 0.25%, Cash & Equivalents at 2.35%, Government Securities at 3.55% and Corporate Debt at 74.80%.

HDFC Banking and PSU Debt Fund

HDFC Banking and PSU Debt Fund 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 March 20, 2014.

HDFC Banking and PSU Debt Fund Category: Banking & PSU Fund with AUM of ₹5,963.48 Crores. It has a 5-year CAGR of 6.97%, an exit load of 0% and an expense ratio of 0.39%. SEBI categorizes its risk as Moderate. The fund’s asset allocation includes Certificate of Deposit at 0.27%, Cash & Equivalents at 0.41%, Government Securities at 3.26% and Corporate Debt at 79.45%.

Kotak Banking and PSU Debt Fund

Kotak Banking and PSU Debt Fund 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 January 1, 2013.

Kotak Banking and PSU Debt Fund Category: Banking & PSU Fund with AUM of ₹5,728.32 Crores. It has a 5-year CAGR of 7.03%, an exit load of 0% and an expense ratio of 0.39%. SEBI categorizes its risk as Moderate. The fund’s asset allocation includes Cash & Equivalents at 0.27%, Government Securities at 3.13% and Corporate Debt at 71.59%.

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 in existence for 9 years and 4 months, having been launched on May 5, 2015.

Nippon India Banking & PSU Debt Fund Category: Banking & PSU Fund with AUM of ₹5,345.36 Crores. It has a 5-year CAGR of 6.98%, an exit load of 0% and an expense ratio of 0.38%. SEBI categorizes its risk as Moderate. The fund’s asset allocation includes Certificate of Deposit at 0.36%, Floating-rate Debt at 1.39%, Cash & Equivalents at 1.51%, Government Securities at 3.99% and Corporate Debt at 70.38%.

HSBC Banking and PSU Debt Fund

HSBC Banking and PSU Debt Fund 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 January 1, 2013.

HSBC Banking and PSU Debt Fund Category: Banking & PSU Fund with AUM of ₹4,802.31 Crores. It has a 5-year CAGR of 6.19%, an exit load of 0% and an expense ratio of 0.23%. SEBI categorizes its risk as Moderately Low. The fund’s asset allocation includes Cash & Equivalents at 0.26%, Government Securities at 0.74% and Corporate Debt at 79.48%.

SBI Banking and PSU Fund

SBI Banking and PSU Fund 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 January 1, 2013.

SBI Banking and PSU Fund Category: Banking & PSU Fund with AUM of ₹3,883.75 Crores. It has a 5-year CAGR of 6.50%, an exit load of 0%, and an expense ratio of 0.34%. SEBI categorizes its risk as Moderate. The fund’s asset allocation includes Cash & Equivalents at 0.35%, Government Securities at 3.56% and Corporate Debt at 72.74%.

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 in existence for 10 years and 11 months, having been launched on September 10, 2013.

DSP Banking & PSU Debt Fund Category: Banking & PSU Fund with AUM of ₹2,427.49 Crores. It has a 5-year CAGR of 6.73%, an exit load of 0% and an expense ratio of 0.32%. SEBI categorizes its risk as Moderate. The fund’s asset allocation includes Certificate of Deposit at 0.26%, Cash & Equivalents at 0.30%, Government Securities at 4.82% and Corporate Debt at 71.56%.

PSU Mutual Fund Meaning

PSU Mutual Funds are thematic funds that primarily invest in stocks of Public Sector Undertakings (PSUs) in India. These funds aim to capitalize on the growth potential and stability of government-owned companies, offering investors exposure to various sectors dominated by PSUs.

These funds typically invest in PSUs across sectors such as energy, banking, utilities and infrastructure. They provide an opportunity for investors to benefit from government initiatives and reforms that may positively impact PSU performance and valuations.

PSU Mutual Funds can be suitable for investors seeking exposure to government-backed companies with potentially stable dividends. However, they may be subject to political and policy risks that can affect PSU’s performance and investor returns.

Features of the Best PSU Mutual Fund India

The main features of the best PSU Mutual Funds in India include focused investment in government-owned companies, potential for stable dividends, exposure to strategic sectors and the backing of government policies. These funds offer a unique opportunity to invest in companies with significant public importance.

• Government ownership: PSU Mutual Funds invest primarily in companies where the government holds a majority stake. This feature provides a level of stability and potential government support during economic downturns.

• Sector diversity: These funds typically invest across various sectors dominated by PSUs, such as energy, banking, utilities, and infrastructure. This diversity helps spread risk while maintaining the PSU focus.

• Dividend potential: Many PSUs have a history of paying regular dividends, which can provide a steady income stream for investors. This feature can be particularly attractive for income-seeking investors.

• Policy-driven growth: PSU Mutual Funds can benefit from government initiatives and reforms that aim to improve the performance and efficiency of public sector companies. This potential for policy-driven growth can lead to capital appreciation.

Top PSU Mutual Fund Based on Expense Ratio

The table below shows the Top PSU Mutual Fund Based on the lowest to highest expense ratio.

Name	Expense Ratio (%)	Minimum SIP (Rs)
HSBC Banking and PSU Debt Fund	0.23	500
DSP Banking & PSU Debt Fund	0.32	100
Bandhan Banking & PSU Debt Fund	0.33	100
SBI Banking and PSU Fund	0.34	1000
Axis Banking & PSU Debt Fund	0.35	100
Nippon India Banking & PSU Debt Fund	0.38	100
Aditya Birla SL Banking & PSU Debt	0.39	1000
ICICI Pru Banking & PSU Debt Fund	0.39	100
HDFC Banking and PSU Debt Fund	0.39	1500
Kotak Banking and PSU Debt Fund	0.39	100

Best PSU Mutual Funds Based on 3Y CAGR

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

Name	CAGR 3Y (Cr)	Minimum SIP (Rs)
ICICI Pru Banking & PSU Debt Fund	6.55	100
Kotak Banking and PSU Debt Fund	6.20	100
Aditya Birla SL Banking & PSU Debt	5.96	1000
HDFC Banking and PSU Debt Fund	5.96	1500
Nippon India Banking & PSU Debt Fund	5.93	100
DSP Banking & PSU Debt Fund	5.80	100
Bandhan Banking & PSU Debt Fund	5.70	100
Axis Banking & PSU Debt Fund	5.68	100
SBI Banking and PSU Fund	5.57	1000
HSBC Banking and PSU Debt Fund	4.87	500

List Of PSU Mutual Funds Based on Exit Load

The table below shows a List Of PSU Mutual Funds Based on the Exit Load base, i.e., the fee that the AMC charges investors when they exit or redeem their fund units.

Name	AMC	Exit Load (%)
ICICI Pru Banking & PSU Debt Fund	ICICI Prudential Asset Management Company Limited	0
Kotak Banking and PSU Debt Fund	Kotak Mahindra Asset Management Company Limited	0
Aditya Birla SL Banking & PSU Debt	Aditya Birla Sun Life AMC Limited	0
HDFC Banking and PSU Debt Fund	HDFC Asset Management Company Limited	0
Nippon India Banking & PSU Debt Fund	Nippon Life India Asset Management Limited	0
DSP Banking & PSU Debt Fund	DSP Investment Managers Private Limited	0
Bandhan Banking & PSU Debt Fund	Bandhan AMC Limited	0
Axis Banking & PSU Debt Fund	Axis Asset Management Company Ltd.	0
SBI Banking and PSU Fund	SBI Funds Management Limited	0
HSBC Banking and PSU Debt Fund	HSBC Global Asset Management (India) Private Limited	0

PSU Mutual Fund Returns

The table below shows PSU Mutual Fund Returns based on 1Y return

Name	Absolute Returns – 1Y (%)	Minimum SIP (Rs)
DSP Banking & PSU Debt Fund	8.38	100
Kotak Banking and PSU Debt Fund	8.23	100
ICICI Pru Banking & PSU Debt Fund	7.99	100
Nippon India Banking & PSU Debt Fund	7.97	100
HDFC Banking and PSU Debt Fund	7.96	1500
Aditya Birla SL Banking & PSU Debt	7.95	1000
SBI Banking and PSU Fund	7.88	1000
Bandhan Banking & PSU Debt Fund	7.63	100
Axis Banking & PSU Debt Fund	7.53	100
HSBC Banking and PSU Debt Fund	7.46	500

Historical Performance of The Best Thematic Mutual Funds In India

The table below shows the Historical Performance of The Best Thematic Mutual Funds In India Based on 5Y return

Name	CAGR 5Y (Cr)	Minimum SIP (Rs)
ICICI Pru Banking & PSU Debt Fund	7.07	100
Kotak Banking and PSU Debt Fund	7.03	100
Nippon India Banking & PSU Debt Fund	6.98	100
HDFC Banking and PSU Debt Fund	6.97	1500
Aditya Birla SL Banking & PSU Debt	6.87	1000
Bandhan Banking & PSU Debt Fund	6.82	100
DSP Banking & PSU Debt Fund	6.73	100
Axis Banking & PSU Debt Fund	6.50	100
SBI Banking and PSU Fund	6.50	1000
HSBC Banking and PSU Debt Fund	6.19	500

Factors to Consider When Investing in PSU Mutual Fund

When investing in PSU Mutual Funds, consider the fund’s historical performance, expense ratio, sector allocation, dividend history, and the potential impact of government policies. Also, evaluate your risk tolerance and investment horizon before choosing a fund.

• Historical performance: Analyze the fund’s past returns over various periods (1-year, 3-year, 5-year) and compare them with its benchmark index and category average. Look for consistent performance rather than just short-term gains.

• Expense ratio: This is the annual fee charged by the fund for managing your investment. A lower expense ratio can significantly impact your overall returns, especially over the long term.

• Sector allocation: Examine the fund’s distribution across different PSU sectors. A well-diversified portfolio can help mitigate risks associated with any single sector’s underperformance.

• Government policies: Stay informed about government initiatives and reforms that may impact PSUs. These policies can significantly influence the performance of PSU Mutual Funds.

• Dividend history: If regular income is a priority, look at the fund’s dividend distribution record. Many PSUs have a history of paying consistent dividends, which can be attractive for income-seeking investors.

How to Invest in Top PSU Mutual Funds?

To invest in top PSU Mutual Funds, start by researching and comparing different funds based on their performance, expense ratios, and investment strategies. Once you’ve selected a fund that aligns with your financial goals and risk tolerance, you can invest through Alice Blue, a user-friendly online investment platform.

Alice Blue provides tools and resources to help you make informed investment decisions. You can choose to invest a lump sum amount or opt for a Systematic Investment Plan (SIP), which allows you to invest a fixed amount regularly.

For most investors, a SIP is recommended as it helps in rupee cost averaging and reduces the impact of market volatility on your investment over time. Remember to review and rebalance your investment periodically to ensure it remains aligned with your financial goals.

Impact of Market Trends on Thematic Mutual Funds In India

Market trends significantly influence thematic mutual funds in India, including PSU Mutual Funds. These funds are particularly sensitive to sector-specific trends, government policies, and overall economic conditions that affect public sector enterprises.

During periods of increased government spending or reforms in PSU sectors, these funds may outperform. Conversely, they might underperform during periods of privatization or when private sector companies are favoured. Market sentiment towards PSUs can also impact fund performance.

How PSU Funds Perform in Volatile Markets?

PSU Funds often demonstrate relative stability during volatile markets due to the government backing of their underlying investments. The perception of PSUs as safer bets during economic uncertainties can lead to better performance compared to some other equity fund categories.

However, their performance can still be affected by market volatility, especially if there are concerns about government policies or fiscal health. The funds’ focus on specific sectors dominated by PSUs can also lead to concentration risk, potentially amplifying volatility in certain market conditions.

Advantages of Investing in The Best Psu Equity Mutual Fund India

The main advantages of investing in the best PSU Equity Mutual Funds in India include exposure to government-backed companies, potential for stable dividends, participation in strategic sectors, and possible benefits from government initiatives and reforms.

• Government backing: PSU Mutual Funds invests in companies with significant government ownership, which can provide a level of stability and potential support during economic downturns.

• Dividend potential: Many PSUs have a history of paying regular dividends, which can provide a steady income stream for investors. This can be particularly attractive for those seeking regular returns.

• Strategic sector exposure: These funds offer exposure to sectors of strategic importance to the Indian economy, such as energy, banking, and infrastructure. This can provide growth opportunities aligned with national economic priorities.

• Policy-driven growth: PSU Mutual Funds can benefit from government initiatives and reforms aimed at improving the performance and efficiency of public sector companies. This can potentially lead to capital appreciation.

Risks of Investing in PSU Mutual Fund

The main risks of investing in PSU Mutual Funds include potential political interference, slower decision-making processes, limited sectoral diversification, and vulnerability to changes in government policies. These factors can impact the performance and returns of PSU funds.

• Political risk: PSUs are subject to government control, which can lead to decisions based on political considerations rather than purely business objectives. This can potentially affect the profitability and efficiency of these companies.

• Policy changes: Government policies and regulations can significantly impact PSUs. Changes in policies can lead to sudden shifts in the business environment for these companies, affecting fund performance.

• Limited diversification: PSU Mutual Funds typically invest in a limited number of sectors where PSUs dominate. This concentration can increase risk if these sectors underperform.

• Inefficiency concerns: Some PSUs may struggle with inefficiencies and bureaucratic processes, which can hinder their competitiveness and growth potential. This can impact the overall returns of PSU Mutual Funds.

Contribution of PSU Funds to Portfolio Diversification

PSU Funds can contribute significantly to portfolio diversification by providing exposure to government-backed companies across strategic sectors. These funds offer a unique investment opportunity in companies that play crucial roles in the Indian economy, potentially adding stability to an investment portfolio.

By including PSU Funds, investors can balance their exposure to private-sector stocks with government-owned enterprises. This diversification can help mitigate overall portfolio risk, as PSUs often behave differently from private sector companies in various market conditions.

Who Should Invest in PSU Funds?

PSU Funds are suitable for investors seeking exposure to government-owned companies and strategic sectors of the Indian economy. They can be appropriate for those with a moderate risk appetite and a long-term investment horizon, typically 5-7 years or more.

These funds can be a good fit for investors who believe in the growth potential of public sector enterprises and government initiatives. They may also appeal to those seeking potentially stable dividends, as many PSUs have a history of regular dividend payments.

Impact of Fund Manager Expertise on PSU Mutual Fund Performance

The expertise of the fund manager plays a crucial role in the performance of PSU Mutual Funds. A skilled manager can navigate the unique challenges and opportunities presented by investing in public sector enterprises, potentially enhancing the fund’s returns.

Experienced managers can better assess the impact of government policies, sector-specific trends, and company fundamentals on PSU performance. They can also make informed decisions about sector allocation and stock selection within the PSU universe, which can significantly influence the fund’s overall performance.

How Much Money Should I Invest In PSU Mutual Funds In India?

The amount you should invest in PSU Mutual Funds depends on your overall financial goals, risk tolerance, and investment portfolio. As a general rule, it’s advisable not to allocate more than 5-10% of your equity portfolio to thematic funds like PSU funds.

Consider your investment horizon, current financial situation, and other investments when deciding the amount. It’s often recommended to start with smaller amounts through SIPs and gradually increase your investment as you become more comfortable with the fund’s performance and risks.

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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.