Choosing the right mutual fund can be challenging for investors, especially when hundreds of schemes are available in the market. Among the many factors investors consider while selecting a fund, ratings and expense ratio are two important ones. Funds that receive higher ratings from research platforms and have relatively lower costs often attract more investor interest.
Based on Value Research ratings and relatively low expense ratios in direct plans, several schemes from SBI Mutual Fund stand out. These funds follow different strategies — from sector-focused investing to diversified large-cap and mid-cap exposure — while keeping costs competitive for investors.
Why ratings and expense ratio matter
Fund ratings, such as those from Value Research, assess a scheme’s historical performance and risk-adjusted returns relative to its peers. While ratings should not be the only factor in decision-making, they offer a quick way for investors to identify funds that have performed consistently within their category.
The expense ratio is equally important. It represents the annual cost charged by the fund house for managing the scheme. Even small differences in expense ratios can significantly affect returns over long investment periods. Generally, direct plans tend to have lower expense ratios because they exclude distributor commissions.
Below are five SBI Mutual Fund schemes that combine relatively strong ratings with comparatively low expense ratios.
1. SBI Banking & Financial Services Fund
Launched on February 26, 2015, the fund tracks the NIFTY Financial Services TRI benchmark.
Since inception, the scheme has delivered a return of around 15.56%.
As of February 28, 2026, it manages assets worth Rs 10,725 crore and has an expense ratio of 0.72% in the direct plan. Value Research has assigned the scheme a 4-star rating.
Risk profile:
The fund falls in the very high risk category.
It has recorded a mean return of 22.46%, with a standard deviation of 10.81%.
Its Sharpe ratio of 1.51 and Sortino ratio of 2.94 suggest strong risk-adjusted performance.
A beta of 0.81 indicates slightly lower volatility than the broader market.
Top holdings:
Major holdings include ICICI Bank (13.46%), State Bank of India (10.45%), Axis Bank (9.37%), Kotak Mahindra Bank (8.50%), and HDFC Bank (6.80%).
Launched on January 1, 2013, this open-ended equity scheme invests across both large-cap and mid-cap companies and tracks the NIFTY Large Midcap 250 TRI benchmark.
The fund has delivered a return of about 16.73% since launch. As of February 28, 2026, it manages assets of ₹38,766 crore, while the expense ratio stands at 0.72% in the direct plan. It carries a 4-star Value Research rating.
Risk profile:
The scheme is classified under very high risk.
It has posted a mean return of 19.36%, with standard deviation of 10.84%, indicating moderate volatility.
Its Sharpe ratio of 1.22 and Sortino ratio of 1.89 reflect decent risk-adjusted performance.
With a beta of 0.85, the fund shows slightly lower volatility than the broader market.
Top holdings:
Key investments include HDFC Bank (5.04%), State Bank of India (3.56%), Axis Bank (3.28%), and Bharat Forge (3.20%).
The SBI Contra Fund, launched on January 1, 2013, follows a contrarian investment strategy—buying stocks that may be temporarily undervalued or out of favour. The scheme tracks the BSE 500 TRI benchmark.
Since inception, it has delivered a return of around 15.81%. As of February 28, 2026, the fund manages ₹49,111 crore in assets and charges an expense ratio of 0.73% in the direct plan. It has received a 5-star rating from Value Research, making it one of the highest-rated funds in this list.
Risk profile:
The scheme falls under the very high risk category.
It has recorded a mean return of 20.17% and a standard deviation of 12.07%.
Its Sharpe ratio of 1.17 and Sortino ratio of 1.78 suggest reasonable risk-adjusted returns. With a beta of 0.93, the fund’s volatility is close to market levels, while an alpha of 3.83 indicates consistent outperformance versus its benchmark.
Top holdings:
Major investments include HDFC Bank (7.31%), Reliance Industries (5.03%), Tata Steel (3.20%), Biocon (3.18%), and Punjab National Bank (3.05%).
Launched on January 1, 2013, this scheme follows a focused investment approach, meaning it invests in a limited number of high-conviction stocks. The fund tracks the BSE 500 TRI benchmark.
Since launch, the fund has delivered a return of around 15.37%. As of February 28, 2026, it manages ₹43,311 crore in assets and charges an expense ratio of 0.73%. The scheme holds a 4-star rating from Value Research.
Risk profile:
The fund is classified as very high risk.
It has recorded a mean return of 19.42% with standard deviation of 10.14%, suggesting moderate volatility.
Its Sharpe ratio of 1.31 and Sortino ratio of 2.06 reflect good risk-adjusted performance. A beta of 0.71 indicates significantly lower volatility compared with the broader market.
Top holdings:
Key holdings include Alphabet Inc Class A (9.17%), State Bank of India (6.38%), HDFC Bank (5.74%), Muthoot Finance (5.42%), and Bajaj Finserv (4.60%).
The SBI Large Cap Fund, launched on January 1, 2013, focuses on investing in large, well-established companies. The scheme tracks the BSE 100 TRI benchmark.
Since its inception, the fund has delivered a return of around 14.58%. As of February 28, 2026, it manages ₹55,246 crore in assets, with an expense ratio of 0.79%. It currently holds a 4-star rating from Value Research.
Risk profile:
The scheme falls in the very high risk category.
It has posted a mean return of 15.58% with standard deviation of 10.99%, indicating moderate volatility. Its Sharpe ratio of 0.86 and Sortino ratio of 1.36 suggest moderate risk-adjusted performance. The fund’s beta of 0.91 indicates slightly lower volatility than the market.
Top holdings:
Major investments include ICICI Bank, HDFC Bank, Reliance Industries, and Larsen & Toubro.
What investors should look at before selecting a fund
While ratings and expense ratios are important indicators, investors should evaluate several other factors before choosing a mutual fund. These include the fund’s long-term performance across market cycles, risk metrics such as volatility and beta, and the consistency of returns compared with peers and benchmarks.
Investors should also review the fund manager’s track record, portfolio diversification, and sector allocation. Understanding the fund’s investment strategy and ensuring it aligns with one’s risk tolerance and investment horizon is equally important.
Ultimately, mutual fund selection should not rely on a single metric. A combination of ratings, cost efficiency, performance consistency, and portfolio quality can help investors make more informed decisions.
Disclaimer: The above content is for informational purposes only. Mutual Fund investments are subject to market risks. Please consult your financial advisor before investing.