Energy is back in the spotlight, but this time, the shift is being driven as much by numbers as by narrative.
Tensions around the Strait of Hormuz, a critical route that carries close to 20% of global oil supply, have once again brought volatility back into energy markets.
Global oil markets have turned volatile, pushing crude prices higher and tightening supply expectations.
For an import-dependent economy like India, this has direct implications for inflation, fiscal balance, and corporate profitability.
Yet, beneath this macro noise, energy demand remains structurally intact, supported by industrial activity and rising power consumption.
This combination of cyclical triggers and structural demand is now beginning to reflect in energy-linked portfolios, bringing the focus back to funds with consistent exposure to the sector.
A set of thematic mutual funds continued to hold energy stocks even when crude prices were low and the sector was out of favour.
This was not a tactical call but a function of their investment mandate, which requires them to allocate at least 80% of their assets to the theme. If the cycle sustains, that exposure is now translating into more visible portfolio outcomes.
We examine five energy mutual funds with exposure to oil and related sectors.
#1 Nippon India Power & Infra Fund
Nippon India Power & Infra Fund is an over two-decade-old fund launched in May 2004.
This scheme invests in securities of companies in power and infrastructure shares with adequate diversification.
As of 31 March 2026, the fund manages an Asset Under Management (AUM) of Rs 65.34 billion (bn).
The fund’s expense ratio (direct plan) of 1.86%. However, keep in mind that thematic funds generally have higher expense ratios.
The fund is almost fully invested in equities with 99.37% allocation. Around 65.5% of the exposure is to Indian equities, while the balance is invested through global funds.
Large-cap stocks accounted for 54.85% of the portfolio, followed by mid-cap (21.94%) and small-cap (23.22%).
Sector-wise, the Energy and Utilities sector accounted for 34.88%, followed by Industrials (34.69%), Consumer Discretionary (9.18%), Materials (8.89%), and Financials (2.97%).
The top 5 stock holdings accounted for 31.52% of the portfolio. Reliance Industries‘ weight stands at (9.58%), followed by NTPC (7.83%), L&T (6.24%), Tata Power (4.41%), and NTPC Green (3.46%).
The scheme’s price-to-earnings (PE) multiple (23.52), which is at a significant premium to the benchmark Nifty Energy TRI (15.4).
The fund believes in a buy-and-hold strategy, as evidenced by its low portfolio turnover ratio of 0.38.
With this approach, the fund has delivered a compounded annual growth rate (CAGR) of 17.67% over the last 10 years. This is slightly lower than the 17.91% CAGR of the benchmark – the Nifty Energy Total Return Index (TRI) – during this period.
It has maintained a standard deviation of 17.82, lower than the benchmark (18.98). This means its returns have fluctuated less than the broader market.
It also ranks higher in risk-adjusted return, with a Sharpe ratio of 0.31, compared to the benchmark of 0.23. A higher Sharpe ratio indicates that a fund has earned a higher return per unit of risk taken.
The fund’s Sortino ratio (0.60) is also higher than the Benchmark’s (0.48). This indicates relatively better downside-risk-adjusted performance in limiting losses during volatile periods.
#2 DSP Natural Resources & Energy Fund
DSP Natural Resources and New Energy is an over two-decade-old fund launched in April 2005.
This scheme invests in companies involved in the exploration, development, production, or distribution of natural resources (energy and mining).
This fund also invests in emerging sectors, including renewable energy, automotive, on-site power generation, energy storage, and energy efficiency technologies.
A unique characteristic of this fund is that it invests up to 35% of its corpus in units of BlackRock Global Funds – Sustainable Energy Fund, World Energy Fund.
The fund states that this scheme is ideal for experienced investors with a robust core portfolio and wish to allocate 10-15% of their total portfolio to higher-risk opportunities. The ideal investment horizon for this is over 10 years.
As of 31 March 2026, the fund manages an AUM of Rs 20.44 bn. The expense ratio (direct plan) is 1.74%.
The fund currently has 81.5% of its portfolio invested in equities, with the remaining 18.5% in debt. Around 65.5% of the exposure is to Indian equities, while the balance is invested through global funds.
Within Indian equities, large-cap stocks accounted for 34.6%, followed by mid-cap (24.9%) and small-cap (6.1%). The remaining portion (15.9%) has been allocated to the BlackRock World Energy Fund (11.9%) and the Sustainable Energy Fund (4%).
In sector allocation, Ferrous Metals accounted for 16.5%, followed by Oil (13.4%), Gas (9%), Non-Ferrous Metals (8.6%), and Petroleum Products (8.5%).
The top 10 stock holdings accounted for 34.09% of the portfolio. Tata Steel had the highest weighting at 8.27%, followed by Jindal Steel (8.23%), ONGC (8.23%), Oil India (5.15%), and Petronet (4.21%).
The scheme’s PE multiple (14.5) is in line with the benchmark Nifty Energy (15.4).
The fund believes in a buy-and-hold strategy, as evidenced by its low portfolio turnover ratio of 0.3.
With this approach, the fund has delivered a CAGR of 19.42% over the last 10 years, beating the benchmark’s 17.91% CAGR. This fund outperforms its benchmark 61.08% of the time and its category 59.39% of the time over a 5-year period.
In addition, the fund delivered a CAGR of more than 12% for 78.2% of the time over a 5-year period, with no negative returns.
The outperformance comes with lower volatility. It has maintained a standard deviation of 14.42, lower than the benchmark (18.98).
Lower volatility is complemented by better risk-adjusted return. It also ranks higher in risk-adjusted return, with a Sharpe ratio of 0.37, compared to the benchmark of 0.23.
Even downside protection is well-managed. The fund’s Sortino ratio (0.79) is also higher than the benchmark’s (0.48).
#3 Tata Resources & Energy Fund
Tata Resource & Energy Fund is a decade-old fund, launched in December 2015.
This is an open-ended equity scheme investing about 80% of its AUM in the resources and energy sector.
The fund manager maintains a balanced portfolio of growth and value stocks. That is, the fund is composed of a balance of secular (non-cyclical) businesses that can deliver growth during a downturn and cyclical plays that can outperform when the particular themes take off (metal, cement, etc.).
As of 30 November, the fund manages an AUM of Rs 12.65 bn.
The expense ratio (direct scheme) is low at 0.57%.
The fund currently has about 95.75% of its portfolio invested in equities, with the remaining 4.25% is held as cash and cash equivalents. Large-cap stocks form the bulk at 56.39%, followed by mid-caps at 18.72% and small-caps at 24.90%.
Metals and Mining accounted for 24.55%, followed by Oil, Gas, and Consumable Fuels (18.65%), Power (16.84%), Construction Materials (14.83%), and Chemicals (12.66%).
The top 5 stock holdings accounted for 27.27% of the portfolio. Vedanta had the highest weight at 7.6%, followed by Ultratech (6.47%), Tata Steel (4.95%), NTPC (4.46%), and Ambuja Cements (3.79%).
The scheme’s PE (18.31) is at a premium to the benchmark Nifty Energy (15.4).
The fund follows a low churn strategy, as evidenced by its moderate portfolio turnover ratio of 0.21.
The fund has delivered a 10-year CAGR of 18.44%, slightly higher than the benchmark’s 17.91% CAGR.
The fund’s returns have fluctuated less than the broader market. It has maintained a standard deviation of 14.26, lower than the benchmark (18.98).
This translates into a higher risk-adjusted return, with a Sharpe ratio of 0.27, exceeding the benchmark (0.23). The fund’s Sortino ratio (0.54) is also higher than the benchmark’s (0.48), indicating the fund has managed downside risk more efficiently while generating returns.
#4 SBI Energy Opportunities Fund
SBI Energy Opportunities Fund was launched in February 2024.
The scheme’s investment objective is to generate long-term capital gain by investing (at least 80% of the net assets) in domestic and/or overseas companies in sectors including the exploration, production, distribution, and processing of traditional and new energy.
The fund manager adopts an active management style & follows a bottom-up approach to stock picking to optimize returns.
As of 31 March 2026, the fund’s AUM was Rs 78.05 bn. The expense ratio (Direct Plan) is 0.8% per annum.
The scheme’s current asset allocation is 94.65% in equity, followed by debt (0.7%) and cash equivalents (4.65%). The scheme’s portfolio is large-cap heavy with a 45.14% allocation, followed by mid-caps (22.34%) and small-caps (32.52%).
In sectoral allocation, Oil, Gas & Consumables accounted for 47.52% of the portfolio, followed by Power (18.11%), Capital Goods (16.72%), Construction (6.02%), and Cash, Cash Equivalents (4.65%).
The fund holds a concentrated portfolio of 34 stocks, with the top 5 stocks accounting for 35.05%.
Reliance Industries holds the highest weightage at 9.12%, followed by Oil and Natural Gas (8.87%), Gail (6.29%), Kalpataru Projects (5.43%), and NTPC (5.34%).
The scheme’s PE multiple (13.26) is slightly below the benchmark Nifty Energy (15.4).
The portfolio turnover ratio is low at 0.18, indicating a buy-and-hold strategy.
With a standard deviation of 17.15, the scheme is also less volatile than the benchmark (18.98).
With a Sharpe ratio of -0.03 against the benchmark’s (0.23), the fund has underperformed on a risk-adjusted basis, failing to compensate for the volatility.
The fund’s Sortino ratio of -0.06, compared with the benchmark’s 0.48, also indicates weaker returns when adjusted for downside risk.
The performance of this scheme has lagged its peers, yielding an absolute return of just 1.06% over the past year, which is still better than the Nifty Energy TRI’s (-5.16%).
#5 ICICI Pru Energy Opportunities Fund
ICICI Prudential Commodities Fund is a relatively new fund, launched in July 2024.
The scheme aims to generate long-term returns by investing in equity and equity-related securities of companies engaged in commodity and commodity-related sectors.
As of 31 March, the fund manages an AUM of Rs 96.68 bn. The expense ratio (direct scheme) is 0.6%.
The fund is currently about 96.9% invested in equities and debt (1.87%), with the remaining (1.23%) held as cash and cash equivalents.
The funds hold 51.8% in large-cap stocks, followed by small-cap (33.33%) and mid-cap (14.88%).
Within sector allocation, Oil, Gas & Consumable Fuels has the highest weightage at 36.98%, followed by Capital Goods (22.26%), Power (21.57%), Construction (8.18%), and Financial Services (2.68%).
The top 5 stock holdings accounted for 32.70%, with NTPC at 8.48%, followed by IOCL (7.36%), Reliance Industries (6.99%), BPCL (6.33%), and Power Grid (3.46%).
The scheme’s PE multiple (15.45) is in line with the benchmark Nifty Energy (15.4).
The fund manager churns the portfolio time to time, as evidenced by its high portfolio turnover of 0.9.
The fund has delivered an absolute return (1-year) of 9.23%, beating the benchmark’s -5.16%.
The fund’s returns have fluctuated less than the broader market. Its standard deviation stood at 13.9, lower than the benchmark (18.98).
The fund’s Sharpe ratio of -0.01, compared with the benchmark’s 0.23, reflects weaker risk-adjusted performance.
This trend continues in the Sortino ratio as well, where the fund’s (-0.02) ratio trails the benchmark’s (0.48), indicating less efficient management of downside risk.
| Scheme | Absolute | CAGR | Risk ratios | ||||
| 1 Year | 3 Year | 5 Year | 10 Year | SD | Sharpe | Sortino | |
| Nippon India Power & Infra | 1.07 | 29.32 | 30.56 | 17.67 | 17.82 | 0.31 | 0.60 |
| DSP Natural Resources & Energy | 8.68 | 22.29 | 26.19 | 19.42 | 14.42 | 0.37 | 0.79 |
| Tata Resources & Energy | 7.42 | 19.70 | 23.25 | 18.44 | 14.26 | 0.27 | 0.54 |
| SBI Energy Opportunities | 1.06 | – | – | – | 17.15 | -0.03 | -0.06 |
| ICICI Pru Energy Opportunities | 9.23 | – | – | – | 13.90 | -0.01 | -0.02 |
| Nifty Energy- TRI | -5.16 | 12.97 | 19.81 | 17.91 | 18.98 | 0.23 | 0.48 |
Bottom line
The divergence across energy funds is hard to ignore. While some schemes have delivered consistent risk-adjusted returns, others continue to lag despite similar exposure. This suggests that outcomes are driven more by portfolio construction and execution than by the theme itself.
As the energy cycle unfolds, simply having exposure may not be enough. Rather, how that exposure is managed could define the performance.
Nonetheless, investors should carefully analyse the scheme’s risk ratios, fund managers’ expertise, and other key performance indicators.
Happy investing.
Data as of 13 April 2026
Rolling period returns are calculated using the Direct Plan-Growth option.
Returns over 1 year are compounded annually.
Standard Deviation indicates risk, while the Sharpe ratio and Sortino ratios measure risk-adjusted return.
They are calculated over 3 years, assuming a risk-free rate of 6% p.a.
The category average of all energy mutual funds considered.
Please note that the returns here are historical.
The funds listed at the top of the table are ranked by 5-year returns. The list of schemes is not exhaustive.
Past performance is not an indicator of future returns.
The securities quoted are for illustration only and are not recommendations.
Speak to your investment advisor for further assistance before investing.
Mutual Fund investments are subject to market risks. Read all scheme-related documents carefully.
Source: ACE MF
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