Following the global COVID-19 pandemic crash in 2020, public sector undertaking (PSU) stocks saw a significant rebound. Since then, PSU stocks have produced strong returns, and the surge has helped a number of PSU-focused thematic mutual funds produce outstanding long-term returns.
According to Value Research, the equity thematic PSU fund category is the highest-performing category for three and five years, with returns of 23.49% and 23.73%, respectively.
Thematic PSU funds are equity mutual funds that allocate at least 80% of their assets to shares of PSU companies. As a result, this fund type may be very volatile if the particular sector performs poorly, which raises the fund’s concentration risk. Other risks associated with thematic PSU funds include interest rate risk, market volatility, and risks related to political and government policy decisions.
Here are the 4 top-performing PSU mutual funds that have delivered more than 20% annualised returns over both three- and five-year periods; however, investors should keep in mind that the top-performer list may change over time, as past returns don’t guarantee future returns.
Top-performing thematic PSU funds in 3 and 5 years
3-year lump-sum performance
| Funds | 3-Year Returns In % | BSE PSU TRI – Benchmark Returns In % | Category Average Returns In % | Returns Since Inception In % |
| SBI PSU Dir | 25.06 | 25.35 | 24.11 | 11.8 |
| ABSL PSU Equity Dir | 24.37 | 25.35 | 24.11 | 23.41 |
| ICICI Pru PSU Equity Dir | 23.91 | 25.35 | 24.11 | 24.27 |
| Invesco India PSU Equity Dir | 23.12 | 25.35 | 24.11 | 16.04 |
5-year lump-sum performance
| Funds | 5-Year Returns In % | BSE PSU TRI – Benchmark Returns In % | Category Average Returns In % |
| ABSL PSU Equity Dir | 24.1 | 25.4 | 23.36 |
| SBI PSU Dir | 24.03 | 25.4 | 23.36 |
| Invesco India PSU Equity Dir | 21.93 | 25.4 | 23.36 |
Source: Value Research as of 30th June 2026
SBI PSU Fund
The fund was launched on January 01, 2013 and currently Rohit Shimpi is the fund manager of SBI PSU Fund. The fund has an expense ratio of 0.68%, and its total AUM (Assets Under Management) is Rs 6,684 Cr.
Top 5 stock holdings: SBI, GAIL (India), Bharat Electronics, Power Grid and NTPC.
Top sector wise holdings: Energy & Utilities, Financial, Industrials, Materials.
Risk profile:
| Mean Return (%) | Standard Deviation (%) | Sharpe (%) | Sortino (%) | Beta (%) | Alpha (%) | |
| SBI PSU Dir | 23.82 | 22.35 | 0.81 | 1.38 | 0.91 | 0.92 |
| BSE PSU TRI | 24.5 | 23.93 | 0.78 | 1.35 | — | — |
| Equity: Thematic-PSU | 23 | 22.42 | 0.77 | 1.32 | 0.92 | 0.05 |
| Source: Value Research |
Its standard deviation is lower than the benchmark and marginally below the category average, which means that the fund has experienced relatively less volatility than both the benchmark and the average PSU thematic fund.
The fund’s Sharpe Ratio is higher than both the benchmark and the category average, indicating that the fund has generated superior returns for every unit of risk taken.
Similarly, the Sortino Ratio exceeds the benchmark and the category average, which suggests that the fund has managed its downside risk more effectively while generating returns for investors.
The fund’s Beta of 0.91 is slightly below the category average of 0.92, indicating that it is less volatile compared to the PSU sector.
Aditya Birla Sun Life PSU Equity Fund
Dhaval Gala is the fund manager of the Aditya Birla Sun Life PSU Equity Fund, which was introduced on December 30, 2019. The fund’s AUM (Assets Under Management) was Rs 6,019 Cr, while its expense ratio is 0.56%.
Top 5 stock holdings: SBI, NTPC, Power Grid, Bharat Heavy Elect and Maharashtra Bank.
Top sector-wise holdings: Financial, Energy & Utilities, Industrials and Materials.
Risk profile:
| Mean Return (%) | Standard Deviation (%) | Sharpe (%) | Sortino (%) | Beta (%) | Alpha (%) | |
| ABSL PSU Equity Dir | 23.42 | 23.31 | 0.76 | 1.29 | 0.96 | -0.32 |
| BSE PSU TRI | 24.5 | 23.93 | 0.78 | 1.35 | — | — |
| Equity: Thematic-PSU | 23 | 22.42 | 0.77 | 1.32 | 0.92 | 0.05 |
Source: Value Research
Its standard deviation is marginally lower than the benchmark but higher than the category average, indicating that the fund has experienced volatility broadly in line with the PSU sector with slightly higher fluctuations than the average fund in its category.
The fund’s returns per unit of total risk have been marginally lower than those of its peers and the benchmark, as seen by its Sharpe Ratio, which is marginally below both the benchmark and the category average.
Similarly, the Sortino Ratio trails the benchmark and the category average, indicating higher downside risk.
The fund’s performance strongly correlates with fluctuations in the PSU sector, as seen by its beta of 0.96 compared to the category average of 0.92.
ICICI Prudential PSU Equity Fund
Antariksha Banerjee is the current fund manager of the ICICI Prudential PSU Equity Fund-Direct Plan, which was launched on September 12, 2022. The fund’s AUM (Assets Under Management) was Rs 1,886 Cr, while its current expense ratio is 0.84%.
Top 5 stock holdings: SBI, NTPC, Power Grid, Life Insurance and Hindustan Aero.
Top sector wise holdings: Energy & Utilities, Financial, Industrials, Materials and Technology.
Risk profile:
| Mean Return (%) | Standard Deviation (%) | Sharpe (%) | Sortino (%) | Beta (%) | Alpha (%) | |
| ICICI Pru PSU Equity Dir | 22.36 | 20.22 | 0.82 | 1.44 | 0.83 | 0.98 |
| BSE PSU TRI | 24.5 | 23.93 | 0.78 | 1.35 | — | — |
| Equity: Thematic-PSU | 23 | 22.42 | 0.77 | 1.32 | 0.92 | 0.05 |
Source: Value Research
The fund’s standard deviation is significantly lower than both the benchmark and the category average, indicating that the fund has experienced relatively lower volatility.
The fund also stands out on a risk-adjusted return basis as its Sharpe Ratio is higher than the benchmark and the category average.
Similarly, the Sortino Ratio exceeds both the benchmark and the category average, indicating that the fund has generated better risk-adjusted returns compared to the downside risk it has taken.
With a Beta of 0.83, the fund is less volatile than the broader PSU sector.
Invesco India PSU Equity Fund
Hiten Jain and Sagar Gandhi are now the fund managers of the Invesco India PSU Equity Fund-Direct Plan, which was introduced on January 1, 2013. The fund’s AUM (Assets Under Management) was Rs 1,473 Cr, while its current expense ratio is 0.79%.
Top 5 stock holdings: SBI, Hindustan Aero, Indian Bank, Bharat Petroleum, and Bharat Electronics.
Top 5 sector wise holdings: Industrials, Energy & Utilities, Financial, and Materials.
Risk profile:
| Mean Return (%) | Standard Deviation (%) | Sharpe (%) | Sortino (%) | Beta (%) | Alpha (%) | |
| Invesco India PSU Equity Dir | 22.39 | 23.82 | 0.7 | 1.16 | 0.96 | -1.37 |
| BSE PSU TRI | 24.5 | 23.93 | 0.78 | 1.35 | — | — |
| Equity: Thematic-PSU | 23 | 22.42 | 0.77 | 1.32 | 0.92 | 0.05 |
The fund’s standard deviation is higher than the benchmark and above the category average, suggesting that investors have experienced considerably higher volatility for the returns the fund has generated.
The fund’s Sharpe Ratio of 0.70 is lower than both the benchmark and the category average, which means that on a risk-adjusted basis, the fund has generated slightly lower returns for every unit of total risk taken compared with its peers and benchmark.
Sortino Ratio measures returns relative to downside risk; the ratio of the fund of 1.16 trails the benchmark and the category average.
A beta below 1 in a mutual fund generally means the fund is less volatile and carries lower risk.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully before investing.
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