Banking Mutual Funds: List of the Best Banking Sector MFs in NSE
Banking mutual funds, a subset of sectoral mutual funds, focus on investments in the banking and financial services sector. These funds allocate a significant portion of their assets to banks and financial institutions’ stocks. It can allow investors to gain from the sector’s growth and stability. However, like all investments, they come with their own set of risks and considerations. Hence, understanding these nuances can help you make informed investment decisions and maximise potential returns.
In this article, let’s dive deep into the best banking mutual funds, their features, how to invest, taxation, and more.
List of Best Sectoral Banking Mutual Funds
| Name | AUM (Rs. in cr.) | CAGR 3Y (%) | CAGR 5Y (%) | Expense Ratio (%) |
|---|---|---|---|---|
| Sundaram Fin Serv Opp Fund | 1,497.89 | 16.70 | 16.46 | 0.77 |
| Invesco India Financial Services Fund | 1,071.62 | 17.24 | 16.44 | 0.93 |
| Nippon India Banking & Financial Services Fund | 6,237.85 | 16.23 | 15.41 | 1.08 |
| SBI Banking & Financial Services Fund | 6,456.95 | 14.97 | 15.01 | 0.74 |
| Tata Banking & Financial Services Fund | 2,374.28 | 14.44 | 14.74 | 0.54 |
| Aditya Birla SL Banking & Financial Services Fund | 3,263.64 | 11.93 | 13.43 | 1 |
| ICICI Pru Banking & Fin Serv Fund | 8,850.47 | 12.34 | 13.04 | 1.02 |
| Taurus Banking & Fin Serv Fund | 11.09 | 11.97 | 12.48 | 1.84 |
| UTI Banking and Financial Services Fund | 1,159.45 | 12.67 | 12.36 | 1.22 |
| Baroda BNP Paribas Banking and Fin Serv Fund | 192.11 | 13.96 | 12.19 | 0.98 |
Disclaimer: Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.
Note: The data on the top 10 banking mutual funds in India list is from 19th November 2024, and the data is derived from Tickertape Mutual Fund Screener, using the following parameters:
- Category: Sectoral Fund – Banks & Financial Services
- Plan: Growth
- 3-yr CAGR
- 5-yr CAGR: Sorted from highest to lowest
🚀 Pro Tip: You can use Tickertape’s Stock Screener to research and evaluate stocks with over 200+ filters and parameters.
Overview of the Top Banking Sector Mutual Funds
Sundaram Financial Services Opportunities Fund
Founded in 1996, Sundaram Asset Management Company Ltd is a prominent mutual fund house in India. It operates under Sundaram Finance Limited, a well-established financial services company. Sundaram Financial Services Opportunities Fund is a sectoral fund focused on investing in the financial services sector, offering investors an opportunity to gain exposure to a concentrated portfolio within this sector.
As of 19th November 2024, the Sundaram Financial Services Opportunities Fund has an AUM (Assets Under Management) of Rs. 1,497.89 cr. The fund has demonstrated a strong performance over the years with a CAGR (Compound Annual Growth Rate) of 16.70% over the last 3 years and 16.46% over the last 5 years. The expense ratio of the fund stands at 0.77%.
Invesco India Financial Services Fund
Invesco Asset Management (India) Private Limited is part of Invesco Ltd, a global investment management firm founded in 1935. The Invesco India Financial Services Fund is a sectoral fund targeting investments within the Indian financial services industry, aiming to capitalise on the growth potential of banking and financial services companies.
The fund has an AUM of Rs. 1,071.62 cr. Its performance metrics are impressive, with a 3-yr CAGR of 17.24% and a 5-year CAGR of 16.44%. The fund’s expense ratio is 0.93%.
Nippon India Banking & Financial Services Fund
Nippon India Banking and Financial Services Fund Direct Growth, previously known as Reliance Mutual Fund, was established in 1995 and is part of the Nippon Life Insurance Company. The Nippon India Banking & Financial Services Fund focuses on the financial services sector in India. The fund has an AUM of Rs. 6,237.85 cr. It boasts a 3-yr CAGR of 16.23% and a 5-yr CAGR of 15.41%. The expense ratio is 1.08%.
SBI Banking & Financial Services Fund
SBI Mutual Fund, a joint venture between the State Bank of India and Amundi, was established in 1987. The SBI Banking & Financial Services Fund is a sectoral fund that focuses on the banking and financial services sector in India. With an AUM of Rs. 6,456.95 cr., the fund has a 3-yr CAGR of 14.97% and a 5-yr CAGR of 15.01%. The expense ratio of this fund is 0.74%.
Tata Banking & Financial Services Fund
Tata Mutual Fund, part of the Tata Group, was established in 1994. The Tata Banking & Financial Services Fund invests primarily in the banking and financial services sector, aiming to generate long-term capital appreciation. The fund manages an AUM of Rs. 2,374.28 cr. It has shown consistent performance with a 3-yr CAGR of 14.44% and a 5-yr CAGR of 14.74%. The expense ratio is 0.54%.
Aditya Birla SL Banking & Financial Services Fund
Aditya Birla Sun Life Mutual Fund, a joint venture between the Aditya Birla Group and Sun Life Financial Inc., was established in 1994. The Aditya Birla SL Banking & Financial Services Fund is a sectoral fund focusing on banking and financial services. With an AUM of Rs. 3,263.64 cr., the fund has a 3-yr CAGR of 11.93% and a 5-yr CAGR of 13.43%. The expense ratio is 1%.
ICICI Prudential Banking & Financial Services Fund
ICICI Prudential Mutual Fund, a joint venture between ICICI Bank and Prudential Plc, was established in 1993. The ICICI Prudential Banking & Financial Services Fund focuses on investments within the banking and financial services sector. The fund manages an AUM of Rs. 8,850.47 cr. It has a 3-yr CAGR of 12.34% and a 5-yr CAGR of 13.04%. The expense ratio is 1.02%.
Taurus Banking & Financial Services Fund
Taurus Banking and Finance Direct Growth Fund was established in 1993 and is one of the oldest mutual fund companies in India. The Taurus Banking & Financial Services Fund is a sectoral fund that invests primarily in the banking and financial services sector. The fund has an AUM of Rs. 11.09 cr. It has a 3-yr CAGR of 11.97% and a 5-yr CAGR of 12.48%. The expense ratio is 1.84%, which is on the higher end compared to other funds in the sector.
UTI Banking and Financial Services Fund
UTI Banking and Financial Services Fund is an equity mutual fund scheme that invests in the shares of banks and financial services companies. The UTI Banking and Financial Services Fund is a sectoral banking mutual fund. With an AUM of Rs. 1,159.45 cr., the fund has a 3-yr CAGR of 12.67% and a 5-yr CAGR of 12.36%. The expense ratio is 1.22%.
Baroda BNP Paribas Banking and Financial Services Fund
Baroda BNP Paribas Banking Fund Direct Growth is a joint venture between Bank of Baroda and BNP Paribas Asset Management, established in 2010. The Baroda BNP Paribas Banking and Financial Services Fund targets investments in the banking and financial services sector. The fund has an AUM of Rs. 192.11 cr. It has a 3-yr CAGR of 13.96 and a 5-yr CAGR of 12.19%. The expense ratio is 0.98%.
How to Invest in Banking Sector Mutual Funds?
Here’s a comprehensive guide on how you can make the most of your investment journey:
Step 1: Open a Demat Account
Visit a mutual fund platform and log in to your existing demat account. If you don’t have one, you can quickly open a demat account on smallcase by providing the necessary documentation and details.
Step 2: Conduct Thorough Research
Before committing your funds, you can conduct thorough research on various banking sector mutual funds available in the market. Analyse their performance history, the expertise of the fund manager, and the overall health of the banking sector. This groundwork helps ensure an informed investment decision.
Step 3: Use Financial Tools for Fund Selection
Identify top-performing banking mutual funds using tools like the Tickertape Mutual Fund Screener. With over 50 pre-loaded filters, it helps you create a comprehensive list by providing insights into the fund’s performance.
Step 4: Diversify Your Investments
You may want to diversify your portfolio within the banking sector. Spreading your investments across different types of banking instruments can help mitigate risks associated with a specific area of focus. Diversification can be a powerful tool for long-term stability.
Step 5: Choose Your Investment Method
Once you’ve selected and made a list of the best banking sector mutual funds in India, access your account and navigate to the ‘Mutual Funds’ section. Decide whether to invest through a Systematic Investment Plan (SIP) or make a one-time lump-sum investment.
- Systematic Investment Plan (SIP): If opting for SIP, determine your monthly investment date, input the desired amount, and select the preferred payment method.
- Lump-Sum Investment: For a one-time investment, choose the lump-sum option, input the investment amount, and complete the payment process.
Step 6: Stay Informed on Market Trends
Keep a vigilant eye on market trends and updates related to the banking sector. Changes in economic conditions, regulatory frameworks, and technological advancements can significantly impact banking mutual funds. Staying informed can empower you to make timely adjustments to your investment strategy.
Step 7: Assess Your Risk Tolerance
You can assess your risk tolerance before entering the banking mutual fund arena. These funds can exhibit volatility, especially in response to sector-specific events. Align your risk tolerance with the inherent unpredictability of the banking sector for a well-balanced investment approach.
By following these steps, you can effectively invest in banking mutual funds and align your investment strategy with your financial goals.
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What are Banking Mutual Funds?
Banking mutual funds, also known as sectoral banking mutual funds, are equity funds that focus on investing in the banking sector. These funds allocate their assets to equities or equity-related instruments within the banking industry, offering investors concentrated exposure to banking securities. This targeted approach allows you to capitalise on the sector’s growth and performance potentially.
Emphasising equities, banking funds align their strategy with the dynamics of banking institutions, making them attractive for those seeking financial success in the banking industry. The strategic asset allocation of these funds aims to maximise returns by predominantly investing in banking equities and related instruments.
How Do Banking Mutual Funds Work?
Banking mutual funds, a type of sectoral mutual fund, primarily invest in equities of banks and financial institutions. Understanding how these funds operate can provide valuable insights for potential investors.
Investment Focus
Banking mutual funds allocate a significant portion of their assets to stocks of banks and financial services companies. These investments might include large-cap, mid-cap, and small-cap banks, as well as non-banking financial companies (NBFCs) and insurance firms. This sector-specific focus allows investors to gain exposure to the banking industry’s growth and stability.
Fund Management
A professional fund manager oversees the operations of banking mutual funds. The manager’s role is to actively select and manage the fund’s portfolio based on market analysis, economic trends, and the financial health of the banking sector companies. This active management aims to optimise returns while managing sector-specific risks.
Net Asset Value (NAV)
The performance of a banking mutual fund is reflected in its Net Asset Value (NAV). NAV is calculated by dividing the total value of the fund’s assets minus its liabilities by the number of outstanding units. The NAV fluctuates daily based on the market value of the investments held by the fund. Investors buy and sell units at the current NAV, which determines the value of their investments.
Types of Gains
Banking mutual funds generate returns through two main types of gains:
- Capital Gains: These occur when the fund sells securities at a higher price than the purchase price. Capital gains can be short-term if the securities are held for less than a year, or long-term if held for more than a year.
- Dividends: Some of the companies in the fund’s portfolio may pay dividends. These dividends are distributed to investors, providing an additional income stream alongside potential capital appreciation.
Risk and Reward
Investing in banking mutual funds carries specific risks associated with the financial sector. Factors such as interest rate changes, regulatory policies, economic conditions, and the overall health of the banking industry can impact fund performance. While these funds can offer significant returns during periods of economic growth, they are also subject to sector-specific risks.
Regulatory Framework
In India, banking mutual funds are regulated by the Securities and Exchange Board of India (SEBI). SEBI sets guidelines to ensure transparency and protect investor interests, which include norms for portfolio diversification, asset allocation, and disclosure requirements. Adhering to these regulations helps maintain the integrity and stability of the financial markets.
Features of Banking Mutual Funds in India
Here are a few key features of banking financial services sector mutual funds:
Specialised Subset
Mutual funds in banking sector form a distinct category within the broader mutual funds industry in India, focusing specifically on investments in the banking sector. They aim to capitalise on the growth and performance of banking stocks.
Professional Management
Each banking mutual fund is professionally managed by an Asset Management Company (AMC). The AMC strategically allocates the fund’s corpus to various securities within the banking industry and financial services, leveraging their expertise to potentially optimise returns for investors.
Investment Pool Dynamics
As with other mutual funds, banking mutual funds operate by pooling contributions from multiple investors. Contributors make periodic contributions—weekly, fortnightly, or monthly—creating a diverse pool of resources. This pooling mechanism allows you to benefit from the collective investment power.
Maturity Date and Earnings Distribution
Every banking mutual fund has a predetermined maturity date. Beyond this date, the fund distributes its earnings among its contributors after accounting for the fees charged by the Asset Manager. This means you can receive returns based on the fund’s performance over the investment period.
Strategic Investment Approach
Unlike random allocation, AMCs carefully select the best-performing companies within the banking sector for fund investments. This strategic approach aims to optimise returns for you by focusing on high-potential banking equities.
Diversified Portfolio
Banking mutual funds offer diversification by investing in a range of banking entities. This may provide you with exposure to various facets of the banking industry, such as retail banking, investment banking, and more. This diversification helps in spreading risk and enhancing the stability of your investment portfolio.
Favourable Banking Sector Trends
Given recent trends, AMCs increasingly favour the Indian banking sector as a prime investment avenue. This reflects the sector’s attractiveness and potential for robust returns, driven by factors such as economic growth, technological advancements, and regulatory support.
Benefits of Investing in Banking Mutual Funds
Investing in banking mutual funds can offer several advantages, making them an attractive option for investors seeking exposure to the financial sector. Here are some key benefits:
Historical Performance
Banking mutual funds have shown strong historical performance. For instance, an analysis published in The Economic Times in 2017 highlighted that the mutual fund banking sector achieved a return of 38% over one year, 21% over three years, and 15.30% over five years. Even in the short term, such as a three-month period, the sector delivered a return of 15%. This historical data suggests that returns from the banking sector can be robust, regardless of the investment window.
Regulatory Protection
The Indian banking sector is highly regulated, with stringent checks and balances imposed by the Reserve Bank of India (RBI) and the government. These regulations ensure the stability and reliability of the banking sector. The rigorous standards for opening, expanding, and shutting down banks ensure that depositors and other lenders are well-protected against volatility. This regulatory environment can provide investors with a sense of security and confidence when investing in mutual funds in banking.
Stability
The Indian banking sector is known for its stability compared to other sectors like IT, oil and gas, and automobile industries, which are often subject to higher risks and market shocks. The banking sector’s relative stability can make investing in banking mutual funds a more secure option, potentially reducing the risk of significant losses. This stability is a crucial factor for investors seeking steady and reliable returns.
How Are Returns Calculated on Banking Sector Mutual Funds?
Understanding how returns are calculated may be crucial when delving into the realm of banking sector mutual funds. This process can offer insights into the fund’s performance and might aid you in making informed decisions. Here’s a breakdown of how returns are determined on banking sector mutual funds:
Net Asset Value (NAV)
Returns on mutual funds, including those focused on the banking sector, are intricately linked to the Net Asset Value (NAV). NAV represents the market value of the fund’s assets minus liabilities. The calculation divides this value by the total number of outstanding units, providing a per-unit value. Changes in NAV over time reflect the fund’s performance and may directly impact returns.
Total Return Index (TRI)
To gauge the holistic performance of the best banking and financial services funds, considering the Total Return Index (TRI) may be imperative. Unlike traditional indices, TRI accounts for both capital gains and income generated by the fund. This comprehensive measure provides a more accurate representation of the fund’s returns.
Why Invest in Banking Sector Mutual Funds?
Stability and Resilience
Banking sector funds may showcase stability and resilience, reflecting the robust nature of the banking industry. These funds can act as a reliable anchor in your investment portfolio, particularly during market fluctuations. The regulation of the banking sector by the Reserve Bank of India (RBI) further enhances this stability by ensuring ethical practices and financial stability.
Capitalising on Economic Growth
Banking sector mutual funds are well-positioned to capitalise on economic growth. As economies expand, the demand for banking and financial services tends to rise, potentially leading to increased profitability for the sector and, consequently, for the mutual funds invested in it.
Diversification Benefits
Including mutual funds in financial services in your investment portfolio may provide diversification benefits. These funds typically invest in a variety of financial instruments within the sector, spreading risk and enhancing the overall stability of your investment portfolio.
Profiting from Interest Rate Movements
The performance of banking stocks is often influenced by interest rate movements. Banking sector mutual funds can benefit from rising interest rates, potentially leading to increased returns for investors.
Professional Fund Management
Investing in banking mutual funds means entrusting your funds to experienced and professional fund managers. These experts conduct in-depth research and analysis to make informed investment in banking sector decisions, increasing the likelihood of optimal returns.
Potential for Dividend Income
Many banking sector mutual funds have a track record of distributing dividends. This can be particularly attractive for income-oriented investors seeking a regular income stream along with the potential for capital appreciation.
How to Choose Good Banking Sector Mutual Funds?
Selecting the right banking sector mutual fund is a crucial step in optimising your investment portfolio. Here are key considerations that may guide your decision-making process:
Performance History
You can begin by assessing the fund’s historical performance. By analysing its track record over different market conditions, you may gauge its resilience and consistency. Funds that have demonstrated stability and growth over time can be considered more reliable.
Fund Manager Expertise
The expertise of the fund manager plays a pivotal role in the fund’s success. It might be useful to research the manager’s track record, experience in the banking sector, and their ability to navigate market fluctuations. A seasoned fund manager may significantly contribute to the fund’s performance.
Expense Ratio
You should keep an eye on the fund’s expense ratio, which reflects the costs associated with managing the fund. Generally, lower expense ratios may be more favourable as they could enhance your overall returns. By comparing the expense ratios of different mutual funds in the banking sector, you can make a more informed decision.
Fund Size and Liquidity
It is important to consider the size of the mutual fund and its liquidity. Larger funds may offer more stability, while liquidity ensures that you can easily buy or sell shares without significantly impacting the fund’s value. Adequate size and liquidity might contribute to a smoother investment experience.
Who Should Invest in Banking Mutual Funds?
Sectoral banking mutual funds India inherently pose a heightened concentration risk compared to other mutual fund categories. These funds appeal to risk-tolerant investors aiming for above-average returns during prosperous times in the banking sector. Ideal for those with an aggressive investment approach, these funds enable investors to leverage the potential of banking stocks for long-term gains.
Investing in banking mutual funds can be particularly suitable for investors who:
Have a High Risk Tolerance
The concentrated nature of sectoral funds means they can be volatile. These funds may be best suited for you if you can withstand significant market fluctuations in pursuit of higher returns.
Seek Long-Term Growth
A prolonged investment horizon is essential to mitigate the risks associated with these funds. The banking sector often experiences cycles of ups and downs, and long-term investment can help smooth out these fluctuations.
Desire Exposure to Top-Performing Banking Equities
By investing in these funds, you gain exposure to a portfolio comprising top-performing banking equities. This can provide a pathway to potentially superior returns as these equities capitalise on economic growth and sector-specific opportunities.
Are Comfortable with Sector Dynamics
These funds may require an understanding of sector dynamics and trends. If you are comfortable with closely monitoring the sector and making informed decisions, you may benefit the most.
Can Leverage Professional Fund Management
These funds are managed by experienced professionals who conduct thorough research and analysis to make informed investment decisions. This expertise may enhance the likelihood of achieving optimal returns.
Investing in banking mutual funds allows you to leverage the growth potential of the banking sector while benefiting from professional fund management. However, it’s crucial to align your investment strategy with your risk tolerance and investment horizon to achieve the best outcomes.
Challenges of Investing in Banking Mutual Funds
Investing in banking mutual funds presents a unique set of challenges that you need to be mindful of. Understanding these hurdles may be crucial for making informed investment decisions. Here’s a detailed look at some of the main challenges:
Market Sensitivity
Banking mutual funds are particularly sensitive to market fluctuations. Economic conditions, interest rates, and regulatory changes heavily influence the financial sector. For instance, changes in monetary policy or economic downturns can significantly impact the profitability of banks, thereby affecting the performance of banking mutual funds. It is important to stay updated with macroeconomic trends and regulatory developments to anticipate potential impacts on your investments.
Risk of Non-Performing Assets (NPAs)
The banking sector is susceptible to the risk of non-performing assets (NPAs), which can negatively affect the performance of banking mutual funds. High levels of NPAs can erode bank profitability and investor confidence. Monitoring the quality of assets held by the banks within the fund’s portfolio and staying informed about the overall health of the banking industry may help you manage this risk.
Interest Rate Volatility
Banking mutual funds are highly responsive to interest rate movements. Fluctuations in interest rates can impact the profitability of banks, subsequently affecting the performance of banking funds. For example, rising interest rates may increase borrowing costs for banks, affecting their margins. Conversely, falling rates can reduce income from loans. Being aware of the interest rate environment and its potential impact on your investment can help you better navigate this volatility.
Regulatory Changes
The financial sector is subject to frequent regulatory changes, which can significantly impact the operations and profitability of banks. These changes can include new banking regulations, changes in reserve requirements, or modifications in lending practices. Keeping abreast of regulatory developments and assessing how these changes may affect your investment strategy is essential.
Diversification Challenges
While banking mutual funds focus on the financial sector, they may lack diversification compared to broader market funds. Over-reliance on a specific industry can expose you to sector-specific risks. It is essential to balance your portfolio by including a mix of investments from various sectors to mitigate concentration risk. Diversifying your investments can help manage the inherent risks associated with sector-specific funds.
Taxation on Banking Mutual Funds as per the Union Budget 2024-25
Banking and financial services mutual funds are taxed according to their asset allocation and holding period. Being aware of these tax implications is essential for making informed financial decisions. The Union Budget for 2024-25 has made significant changes to the taxation on equity mutual funds. Here we have listed these changes, along with the revised tax rates for equity mutual funds:
Short-Term Capital Gains Tax
Any gains made when holding equity mutual funds for less than 12 months are considered short-term capital gains. The Union Budget 2024-25 increased the tax rate on these gains to 20%. The STCG tax rate was previously 15%.
Long-Term Capital Gains Tax
For equity mutual funds held for over a year, gains are classified as long-term capital gains. The new budget introduces these key changes:
- Tax-Free Limit: The capital gains up to Rs. 1.25 lakh per year are tax-free. This is an increase from the previous limit of Rs. 1 lakh.
- Tax Rate: The gains exceeding Rs. 1.25 lakh are now taxed at a flat rate of 12.5%. This is an increase from the previous rate of 10%.
- Indexation: The benefit of indexation, which allowed investors to adjust the purchase price for inflation, has been removed for all asset classes, including equity mutual funds.
Indexation was a method that allowed investors to adjust the purchase price of assets for inflation. This adjustment reduced taxable profits when selling assets like property or gold. Previously, these long-term capital gains were taxed at 20%. The new rule imposes a flat 12.5% tax on all long-term capital gains but eliminates any indexation benefits.
| Capital Gains Tax | Holding Period | Old Rate | New Rate |
| Short-Term Capital Gains (STCG) | Less than 12 months | 15% | 20% |
| Long-Term Capital Gains (LTCG) | More than 12 months | 10% | 12.50% |
Factors to Consider Before Investing in Banking Mutual Funds
Before venturing into sectoral banking mutual funds, you may want to consider the following factors:
- Risk Dynamics: Sectoral banking funds come with heightened risk levels due to their exclusive focus on the banking sector. These finance sector mutual funds may flourish when the banking sector performs well, making them particularly suitable for more daring investors.
- Time Commitment: Given the increased risk associated with concentration in these funds, a longer investment horizon may be essential. Staying invested for at least five years can significantly reduce risks. You should ensure your investment aligns with this timeframe for optimal outcomes.
- Performance Against Benchmarks: Evaluating a fund’s performance against its benchmark index can provide insights into its effectiveness. A banking mutual fund should be compared to a relevant banking index rather than an unrelated index like IT or energy.
- Fund Manager’s Expertise: The experience and track record of the fund manager can significantly impact the fund’s performance. Assess the manager’s tenure and past performance to gauge their capability in managing the fund successfully.
To Wrap It Up…
Investing in banking mutual funds can be a strategic move for those looking to capitalise on the robust performance and stability of the banking sector. While market sensitivity and the risk of non-performing assets remain challenges, the benefits of historical performance, regulatory protection, and sector stability may provide compelling reasons to consider banking mutual funds as part of a diversified investment portfolio. However, by staying informed about market trends, regulatory changes, and the overall health of the banking sector, you can navigate the challenges and leverage the benefits of banking mutual funds to achieve your financial goals.
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Frequently Asked Questions on Sectoral Banking Mutual Funds
Banking sector mutual funds, often known as sectoral banking mutual funds, specialise in equity investments concentrated within the banking industry. These funds allocate a significant portion of their assets to banking and financial services stocks, aiming to capitalise on the growth and stability of the banking sector.
Investing in bank mutual funds India may offer exposure to the financial sector’s stability and growth potential. However, its suitability depends on your financial goals, risk tolerance, and current market conditions.
To invest in a bank mutual fund in financial services, begin by registering on an online investment platform. Provide your name, email, PAN, and Aadhaar number. Verify your identity by uploading scanned copies of your PAN card, Aadhaar card, and bank statement. Then, select a mutual fund that matches your investment goals and risk tolerance.
Whether to invest in banking sector mutual funds depends on your financial goals, risk tolerance, and factors like the economic climate, investment objectives, and sector performance outlook. Evaluating these elements can help you determine if these funds are suitable for your portfolio.
No, banking mutual funds are not entirely risk-free. Like all investments, they carry certain risks which can vary based on market conditions, economic trends, and the specific securities held within the fund.
Here is a list of the best sectoral mutual funds sorted according to their 3-yr CAGR:
1. ICICI Pru Infrastructure Fund
2. HDFC Infrastructure Fund
3. LIC MF Infra Fund
4. DSP India T.I.G.E.R Fund
5. Nippon India Power & Infra Fund
Note: The data on this list was taken on 19th November 2024. Investors should also conduct thorough research and consult a financial advisor before investing.
Here is the aforementioned list of sectoral banking and financial mutual funds sorted according to their 5-yr CAGR:
1. Sundaram Financial Services Opportunities Fund
2. Invesco India Financial Services Fund
3. Nippon India Banking & Financial Services Fund
Note: The data on this list of best banking mutual funds 2024 was taken on 19th November 2024. Investors should also conduct thorough research and consult a financial advisor before investing.
