ET NEWS

SBI PSU Fund managed by SBI Mutual Fund offered the highest CAGR in the last three years and five years respectively among all the equity mutual funds, an analysis by ETMutualFunds showed. In the last three years, the fund gave a CAGR of 32.14% and around 28.74% in the last five years (Source: ACE MF).Launched in July 2010, the fund is not given any rating by Morningstar and Value Research. For this fund, according to Value Research, each category must have a minimum of 10 funds for it to be rated, which is not the case for the PSU category as there are five funds. As per Morningstar, this category is a non rateable category fund.Also Read | Will secondary market SGB maturity returns now be taxed? Budget 2026 has changed the rulesBased on the trailing returns, the fund has outperformed its category average in the last three and five years whereas in the last 10 years, it failed to outperform its benchmark. As in the last three years and five years, the fund gave 32.14% and 28.74% respectively, the category average was 30.60% and 27.94% respectively. Since its inception, the fund has delivered a CAGR of 8.35%. Note, the data for the benchmark BSE PSU TRI was not available to compare the performance of the fund.On the basis of daily rolling returns, the fund has delivered a CAGR of 15.23% in the last five years, 8.27% in the last seven years, and 7.79% in the last 10 years.A monthly SIP made in the fund since its inception would have been Rs 59.25 lakh with an XIRR of 13.67%. A lump sum investment of Rs 1 lakh made in the fund since its inception would have been Rs 3.48 lakh with a CAGR of 8.34%.How does the fund house decode the performance?PSU stocks have been strong performers, both on an absolute basis and relative to the broader market post 2020, due to an earnings revival and valuation re rating and this tailwind clearly aided our fund’s performance, Rohit Shimpi, Fund Manager, SBI PSU Fund shared with ETMutualFunds.Top contributors for the fund over the last five years have been our holdings in PSU banks and financial institutions, industrials including defence, utilities including electric utilities, energy and metals. These stocks were aided by improvement in asset quality of PSU banks, growth in defence and power, and a positive commodity cycle impacting metals.Our fund’s strategy has not changed significantly over time, however in mid 2024, we did feel that certain pockets within PSUs were seeing exuberance, and we realigned the portfolio towards large cap stocks within the PSU space. Overall, while being highly stock specific, we remain more positive on large cap stocks within the PSU space at this point in time, Shimpi further said.What experts say on SBI PSU FundAccording to an expert, with the fund comfortably outperforming its category average, this strong performance marks a sharp improvement over its long term historical returns and reflects the powerful rally seen in public sector stocks in recent years.Abhishek Bhilwaria, BhilwariaMF (AMFI registered MFD), shared with ETMutualFunds that the primary drivers of this performance have been favourable macroeconomic conditions for PSUs and focused portfolio positioning. The government led reforms, balance sheet clean ups in public sector banks, higher capital expenditure and policy support for infrastructure, defence and energy companies have significantly improved earnings visibility across the sector.“In addition, the fund has maintained high exposure to core PSU segments such as financial services, energy and power, which have been among the biggest beneficiaries of the economic cycle.”He further said that the fund has also benefited from a concentrated portfolio approach, with its top holdings accounting for over half of its assets and stocks such as State Bank of India, Bharat Electronics and NTPC have delivered strong returns and played a major role in boosting overall fund performance, and a measured allocation to mid cap PSUs further enhanced returns during periods of market momentum.Also Read | Silver & gold ETFs rally up to 9% as bullion boom continues. Should you invest now?As per the last available portfolio data, the top 10 stock holding of the fund is SBI with an allocation of 17.80%, followed by NTPC of around 7.70%, and Bank of Maharashtra with an allocation of 3.65%.Based on the sectoral allocation, the fund holds 30.05% in banks, 13.49% in power, and 13.33% in crude oil. Around 12.32% is allocated to capital goods, 8.53% to gas transmission, and 6.30% to mining.So has the fund benefited more from stock selection or sector trends? Bhilwaria said that the SBI PSU Fund has benefited more from broad sector trends, with stock selection acting as a differentiating factor rather than the primary driver and the re rating of the PSU sector as a whole has been the foundation of the fund’s strong returns.“Improved asset quality in PSU banks, sustained government spending on infrastructure and defence, and renewed investor confidence in public sector enterprises lifted the entire category. This is evident from the fact that average PSU funds have also delivered strong multi year returns, indicating that the rally was sector wide.”However, SBI PSU Fund’s ability to consistently rank at the top of the category stems from its concentrated exposure to high conviction names and its willingness to take calculated bets across market capitalisations. By overweighting leaders such as SBI and Bharat Electronics and maintaining exposure to select mid cap PSUs, the fund was able to capture incremental gains over peers.The fund holds 97.12% in equity, 0.08% in debt, and 2.80% in others. Based on market capitalisation, the fund holds 68.95% in large caps, 21.21% in mid caps, 2.89% in others, and 6.96% in small caps.Should one focus on this sector now post Budget 2026?Bhilwaria said that following the Union Budget 2026, the outlook for PSU funds has turned more cautious in the near term. PSU bank stocks corrected sharply after the budget due to the absence of fresh capital infusion announcements and profit booking after a strong pre budget rally and this highlights the sensitivity of PSU stocks to policy signals and market expectations.“That said, the longer term structural story remains intact. The government’s continued emphasis on capital expenditure, particularly in power, defence, railways and infrastructure, supports earnings growth for several PSU companies. As a result, PSU funds may still offer opportunities, but a selective and disciplined approach is essential rather than aggressive lump sum allocations.”And lastly, given their very high risk profile, sectoral and thematic funds such as PSU funds should form only a small part of an investor’s portfolio. Most experts recommend limiting exposure to a single sector fund to around 10% of the overall portfolio.He further said that these funds should be treated as satellite investments, while the core portfolio remains anchored in diversified equity funds and investors whose PSU allocation has increased significantly due to past rallies may also consider rebalancing to manage risk.Also Read | NFO Insight: Does Kotak Services Fund offer access to India’s core growth engine?Key risk ratios and investment styleThe PE and PBV ratio of this fund were recorded at 19.66 times and 3.12 times respectively whereas the dividend yield ratio was recorded at 2.39% as of December 2025.ETMutualFunds analysed the other key ratios of the fund over a three year period. Based on the last three years, the scheme has offered a Treynor ratio of 2.15 and an alpha of 0.18. The Sortino ratio of the scheme was recorded at 0.82. The return due to net selectivity was recorded at 0.12 and return due to improper diversification was recorded at 0.05 in the last three years.The investment style of the fund is to invest in growth oriented stocks across large cap market capitalisations.Others in PSU basketApart from SBI PSU Fund, there are three other actively managed funds in the category which have completed three years of existence in the industry. Invesco India PSU Equity Fund gave 31.74%, Aditya Birla SL PSU Equity Fund gave 29.49%, and ICICI Prudential PSU Equity Fund gave 29.03% in the last three years.Post seeing strong performance by these funds, what is the outlook of these funds? The expert said that the outlook for the PSU sector in early 2026 is one of selective long term opportunity combined with near term volatility. Fundamentally, many PSUs are in a stronger position than in previous cycles, with healthier balance sheets, improved governance and steady cash flows and several companies continue to offer attractive dividend yields and benefit from government backed order visibility.“However, market sentiment has become more discerning. Much of the valuation re rating seen over the past few years is already priced in, particularly in PSU banks. Budget related uncertainty, evolving governance reforms and ambitious disinvestment targets have added to short term fluctuations. As a result, broad based sector rallies may be limited going forward.”He further said that for PSU funds, this suggests a phase of consolidation rather than runaway gains. Performance is likely to be driven by stock specific fundamentals rather than pure sector momentum. Investors should approach PSU funds with a medium to long term horizon, an ability to tolerate volatility and a clear understanding that returns may be uneven, and a selective and measured exposure remains the most prudent strategy in the current environment.One should always consider risk appetite, investment horizon, and goals before making any investment decisions.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)If you have any mutual fund queries, message ET Mutual Funds on Facebook or Twitter. We will get it answered by our panel of experts. Do share your questions at ETMFqueries@timesinternet.in along with your age, risk profile, and Twitter handle.

Delhi Police has arrested Al Falah University chairman Jawad Ahmed Siddiqui in a case related to alleged fraud and irregularities, officials said.The arrest follows the complaints filed by the University Grants Commission (UGC). The police had registered two separate FIRs against Siddiqui in the matter. Police said that Siddiqui was produced before a Delhi court, which granted the Crime Branch four days of police custody for further investigation.On Saturday, a Delhi Saket Court listed the hearing of arguments for consideration of the Enforcement Directorate's chargesheet against Al Falah Group chairman Jawad Ahmed Siddiqui to February 13.The Enforcement Directorate (ED) filed the charge sheet against Siddique and Al Falah Charitable Trust in an alleged money-laundering case on January 16.Additional Sessions Judge (ASJ) Sheetal Chaudhary Pradhan listed the matter for consideration after hearing submissions of counsel for Siddiqui, who sought time for scrutiny of documents filed Alongwith the charge sheet.According to the agency, the investigation was initiated on the basis of two FIRs registered by the Delhi Police Crime Branch. The FIRs alleged that the university had falsely claimed accreditation from the National Assessment and Accreditation Council (NAAC).The Enforcement Directorate has informed the court that it has provisionally attached assets as part of its probe under the Prevention of Money Laundering Act (PMLA).Earlier, the ED told the court that Siddiqui was arrested in connection with alleged money laundering involving the Al Falah Charitable Trust, which controls the university and its affiliated educational institutions. The agency's action followed the Crime Branch FIRs alleging that the university and its institutions falsely advertised expired NAAC accreditation grades.The ED has further alleged that claims of regulatory recognition were fabricated to mislead students and parents, thereby inducing admissions and the collection of fees through misrepresentation. The court recorded that the agency's financial analysis indicated that funds collected during the relevant period appeared to be linked to the alleged misrepresentations, bringing them within the ambit of proceeds of crime under the PMLA.Searches conducted at multiple locations led to the recovery of cash, digital devices, and financial records. The ED told the court that certain contracts were allegedly diverted to entities linked to the accused's family, and that senior officials confirmed Siddiqui's role in approving major financial decisions. The agency also pointed to alleged layering of funds through related entities to obscure the money trail.Notably, investigations into the November 10, 2025, Red Fort car blast--which resulted in 15 deaths--revealed extensive links to Al-Falah University and its parent body, the Al-Falah Charitable Trust.The driver of the explosive-laden car was identified via DNA as Dr Umar un Nabi, an Assistant Professor in General Medicine at Al-Falah University. Several other university staff members, including Dr. Muzammil Ganaie and Dr. Shaheen Saeed, were arrested for alleged roles in a "white-collar" terror module linked to Jaish-e-Mohammed and Ansar Ghazwat-ul-Hind.

Motilal Oswal Private Wealth is advising investors to adopt a balanced allocation strategy — anchoring portfolios with large-cap or hybrid funds, and complementing them with staggered exposure to midand small-caps — with sentiment improving following the finalisation of the India-US trade deal.“Investors could allocate 50% to large caps and hybrids, 40% to mid and small caps, and 10% to global markets,” says Ashish Shanker, MD & CEO, Motilal Oswal Private Wealth. He recommends making lumpsum allocations to large caps and hybrids immediately, while staggering investments into mid and small caps over the next couple of months. Within global markets, he favours emerging-market exposure. Following the sharp run-up in silver prices, the wealth manager suggests partial profit-booking for investors with heavy exposure, while maintaining a neutral stance on gold for portfolio stability. Those under-allocated to gold can consider gradual accumulation on dips for ‘moderate’ medium-term returns.