What are the top performing Sectoral-Banking funds?

Based on 1-year returns, the top performing Sectoral-Banking funds are Motilal Oswal Nifty MidSmall Financial Services Index Fund Direct-Growth with 18.30% return, Quant BFSI Fund Direct-Growth with 17.67% return, and SBI BSE PSU Bank Index Fund Direct-Growth with 15.21% return. The category average 1-year return is 5.74%.

Which Sectoral-Banking funds have given the best returns over 3 years?

Over a 3-year period, the best performing Sectoral-Banking funds are Motilal Oswal Nifty MidSmall Financial Services Index Fund Direct-Growth with a 27.68% CAGR, Quant BFSI Fund Direct-Growth with 19.23% CAGR, and SBI BSE PSU Bank Index Fund Direct-Growth with 16.99% CAGR. The category average 3-year return stands at 14.02% CAGR.

Which Sectoral-Banking funds have given the best returns over 5 years?

Over a 5-year period, the top Sectoral-Banking funds are Motilal Oswal Nifty MidSmall Financial Services Index Fund Direct-Growth with a 15.78% CAGR, Quant BFSI Fund Direct-Growth with 15.63% CAGR, and SBI BSE PSU Bank Index Fund Direct-Growth with 14.77% CAGR. The category average 5-year return is 13.30% CAGR.

What is the minimum amount to invest in Sectoral-Banking funds?

You can start investing in Sectoral-Banking funds with a minimum SIP of ₹99 per month or a minimum lumpsum of ₹100. The minimum investment varies across fund houses — some funds allow even lower entry points.

How are Sectoral-Banking fund returns taxed?

Gains from Sectoral-Banking funds held for less than 12 months are taxed at 20% (Short-Term Capital Gains). Gains on units held for 12 months or more are taxed at 12.5% (Long-Term Capital Gains), with ₹1.25 lakh per year being exempt per financial year. Dividends (IDCW) are taxed at your applicable income tax slab rate.

Which Sectoral-Banking funds have the lowest expense ratio?

Among Sectoral-Banking funds, ICICI Prudential Nifty Bank Index Fund Direct-Growth has the lowest expense ratio at 0.23% (Direct Plan), followed by Navi Nifty Bank Index Fund Direct-Growth at 0.24%. Lower expense ratios directly improve your net returns over the long term.

How many Sectoral-Banking mutual funds are available in India?

There are currently 47 Sectoral-Banking mutual funds available in India across different fund houses. You can compare all 47 funds on Sharpely based on returns, risk, AUM, and expense ratio to find the one that suits your investment goals.

mutual funds category

Sectoral Banking

Sectoral-Banking Funds

Q: What are the largest Sectoral-Banking mutual funds by assets?

The largest Sectoral-Banking funds by Assets Under Management (AUM) are ICICI Prudential Banking and Financial Services Direct Plan-Growth with ₹ 11,034.20 crore, SBI Banking & Financial Services Fund Direct-Growth with ₹ 10,844.80 crore, and Nippon India Banking & Financial Services Fund Direct-Growth with ₹ 7,788.58 crore. Together, there are 47 Sectoral-Banking funds available in India.

Sectoral funds invest in the stocks of a particular sector. So, banking sectoral funds will invest a majority of the funds in banking stocks. As per the SEBI guidelines, a minimum of 80% of the funds will be invested in banking stocks.

Total Schemes

No. of schemes

Total AUM

₹ 0.63Lakh Cr

As on latest

Category Return (5Y)

13.30 %

CAGR

Benchmark

11.23%

NIFTY 500 TRI

Category Returns (%)

Period	1M	6M	1Y	3Y CAGR	5Y CAGR	10Y CAGR	YTD
Sectoral-Banking	2.30 %	0.11 %	5.74 %	14.02 %	13.30 %	13.80 %	0.73 %
Benchmark	1.96 %	-2.14 %	3.80 %	9.66 %	11.23 %	12.59 %	-1.30 %

Top Sectoral-Banking Funds (by AUM)

Fund Name	AUM (₹ Cr)	1Y Return	3Y CAGR	5Y CAGR	Expense Ratio
ICICI Prudential Banking and Financial Services Direct Plan-GrowthNAV: ₹152.47	11,034.20 Cr	-0.21%	11.38%	10.73%	1.20%
SBI Banking & Financial Services Fund Direct-GrowthNAV: ₹50.29	10,844.80 Cr	4.48%	16.99%	14.08%	1.16%
Nippon India Banking & Financial Services Fund Direct-GrowthNAV: ₹725.72	7,788.58 Cr	4.01%	14.21%	14.77%	1.05%
HDFC Banking & Financial Services Fund Direct-GrowthNAV: ₹19.74	4,582.29 Cr	7.09%	14.39%	14.26%	0.94%
Aditya Birla Sun Life Banking & Financial Services Fund Direct-GrowthNAV: ₹72.82	3,675.70 Cr	5.02%	12.78%	12.63%	1.15%
Tata Banking and Financial Services Fund Direct-GrowthNAV: ₹52.79	3,170.66 Cr	2.97%	13.62%	13.90%	0.91%
Mirae Asset Banking and Financial Services Fund Direct-GrowthNAV: ₹23.93	2,304.89 Cr	6.80%	15.08%	14.69%	0.68%
DSP Banking & Financial Services Fund Direct-GrowthNAV: ₹15.50	2,012.45 Cr	12.80%	-	-	0.83%
Invesco India Financial Services Fund Direct-GrowthNAV: ₹180.48	1,811.00 Cr	8.28%	19.23%	15.78%	0.92%
Sundaram Financial Services Opportunities Fund Direct-GrowthNAV: ₹126.63	1,681.38 Cr	5.82%	15.49%	15.63%	0.86%
Kotak Banking & Financial Services Fund Direct-GrowthNAV: ₹17.56	1,486.94 Cr	8.21%	14.66%	-	0.81%
UTI Banking and Financial Services Fund Direct Plan-GrowthNAV: ₹230.38	1,429.59 Cr	5.15%	14.11%	13.25%	1.35%
Bandhan Financial Services Fund Direct-GrowthNAV: ₹16.01	1,107.29 Cr	3.78%	-	-	0.89%
HSBC Financial Services Fund Direct-GrowthNAV: ₹12.96	926.56 Cr	8.97%	-	-	0.96%
Quant BFSI Fund Direct-GrowthNAV: ₹22.07	837.93 Cr	17.67%	27.68%	-	1.86%

About Sectoral-Banking Funds

What is it?

Objective

The objective of these funds is to generate maximum returns by focusing on and investing in the banking sector.

Suitability and opinion

These funds are suitable for high-risk investors. We believe concentration risk is very high in any sectoral funds and the impact of the market cycle can be severe in this category. This category is suitable for informed investors who are bullish on the banking sector. You should have a solid understanding of the sector before you invest in such funds. Also, entry and exit timings matter in sectoral equity funds, so we can not define the ideal time horizon for any particular sectoral fund. You should not allocate more than 10% of your portfolio to any sectoral funds.

Sectoral-Banking vs Other Categories

5Y CAGR Return Comparison

14.32%

13.39%

13.30%

13.26%

13.18%

Thematic-Energy

Thematic-Quant

Sectoral-Banking

Thematic-Consumption

Focused

Key Insights

Sectoral-Banking delivered 13.30% CAGR over the last 5 years.

It ranks #16 out of 27 categories based on 5Y performance.

Below the category average return of 14.24%.

15 categories outperform it, while 11 categories have lower returns.

Top performer: Thematic-PSU (23.72%).

Lowest performer: Sectoral-Technology (6.73%).

Let's have a closer look

Now let us jump and check about these top 15 mutual fund schemes.

ICICI Prudential Banking and Financial Services Direct Plan-Growth

Fund Performance: ICICI Prudential Banking and Financial Services Direct Plan-Growth has given 11.38% annualized returns in the past three years and 10.73% in the last 5 years. The ICICI Prudential Banking and Financial Services Direct Plan-Growth comes under the Equity category of ICICI Prudential Mutual Fund.

Minimum Investment Amount: The minimum amount required to invest in ICICI Prudential Banking and Financial Services Direct Plan-Growth via lump sum is ₹ 5,000.00 and via SIP is ₹ 100.00.

Min Investment Amt

₹ 5,000.00

AUM

₹ 11,034.20Cr

1Y Returns

-0.21%

Expense Ratio

1.20%

SBI Banking & Financial Services Fund Direct-Growth

Fund Performance: SBI Banking & Financial Services Fund Direct-Growth has given 16.99% annualized returns in the past three years and 14.08% in the last 5 years. The SBI Banking & Financial Services Fund Direct-Growth comes under the Equity category of SBI Mutual Fund.

Minimum Investment Amount: The minimum amount required to invest in SBI Banking & Financial Services Fund Direct-Growth via lump sum is ₹ 5,000.00 and via SIP is ₹ 500.00.

Min Investment Amt

₹ 5,000.00

AUM

₹ 10,844.80Cr

1Y Returns

4.48%

Expense Ratio

1.16%

Nippon India Banking & Financial Services Fund Direct-Growth

Fund Performance: Nippon India Banking & Financial Services Fund Direct-Growth has given 14.21% annualized returns in the past three years and 14.77% in the last 5 years. The Nippon India Banking & Financial Services Fund Direct-Growth comes under the Equity category of Nippon India Mutual Fund.

Minimum Investment Amount: The minimum amount required to invest in Nippon India Banking & Financial Services Fund Direct-Growth via lump sum is ₹ 5,000.00 and via SIP is ₹ 100.00.

Min Investment Amt

₹ 5,000.00

AUM

₹ 7,788.58Cr

1Y Returns

4.01%

Expense Ratio

1.05%

HDFC Banking & Financial Services Fund Direct-Growth

Fund Performance: HDFC Banking & Financial Services Fund Direct-Growth has given 14.39% annualized returns in the past three years and 14.26% in the last 5 years. The HDFC Banking & Financial Services Fund Direct-Growth comes under the Equity category of HDFC Mutual Fund.

Minimum Investment Amount: The minimum amount required to invest in HDFC Banking & Financial Services Fund Direct-Growth via lump sum is ₹ 100.00 and via SIP is ₹ 100.00.

Min Investment Amt

₹ 100.00

AUM

₹ 4,582.29Cr

1Y Returns

7.09%

Expense Ratio

0.94%

Aditya Birla Sun Life Banking & Financial Services Fund Direct-Growth

Fund Performance: Aditya Birla Sun Life Banking & Financial Services Fund Direct-Growth has given 12.78% annualized returns in the past three years and 12.63% in the last 5 years. The Aditya Birla Sun Life Banking & Financial Services Fund Direct-Growth comes under the Equity category of Aditya Birla Sun Life Mutual Fund.

Minimum Investment Amount: The minimum amount required to invest in Aditya Birla Sun Life Banking & Financial Services Fund Direct-Growth via lump sum is ₹ 1,000.00 and via SIP is ₹ 100.00.

Min Investment Amt

₹ 1,000.00

AUM

₹ 3,675.70Cr

1Y Returns

5.02%

Expense Ratio

1.15%

Tata Banking and Financial Services Fund Direct-Growth

Fund Performance: Tata Banking and Financial Services Fund Direct-Growth has given 13.62% annualized returns in the past three years and 13.90% in the last 5 years. The Tata Banking and Financial Services Fund Direct-Growth comes under the Equity category of Tata Mutual Fund.

Minimum Investment Amount: The minimum amount required to invest in Tata Banking and Financial Services Fund Direct-Growth via lump sum is ₹ 5,000.00 and via SIP is ₹ 100.00.

Min Investment Amt

₹ 5,000.00

AUM

₹ 3,170.66Cr

1Y Returns

2.97%

Expense Ratio

0.91%

Mirae Asset Banking and Financial Services Fund Direct-Growth

Fund Performance: Mirae Asset Banking and Financial Services Fund Direct-Growth has given 15.08% annualized returns in the past three years and 14.69% in the last 5 years. The Mirae Asset Banking and Financial Services Fund Direct-Growth comes under the Equity category of Mirae Asset Mutual Fund.

Minimum Investment Amount: The minimum amount required to invest in Mirae Asset Banking and Financial Services Fund Direct-Growth via lump sum is ₹ 5,000.00 and via SIP is ₹ 99.00.

Min Investment Amt

₹ 5,000.00

AUM

₹ 2,304.89Cr

1Y Returns

6.80%

Expense Ratio

0.68%

DSP Banking & Financial Services Fund Direct-Growth

Fund Performance: The DSP Banking & Financial Services Fund Direct-Growth comes under the Equity category of DSP Mutual Fund.

Minimum Investment Amount: The minimum amount required to invest in DSP Banking & Financial Services Fund Direct-Growth via lump sum is ₹ 100.00 and via SIP is ₹ 100.00.

Min Investment Amt

₹ 100.00

AUM

₹ 2,012.45Cr

1Y Returns

12.80%

Expense Ratio

0.83%

Invesco India Financial Services Fund Direct-Growth

Fund Performance: Invesco India Financial Services Fund Direct-Growth has given 19.23% annualized returns in the past three years and 15.78% in the last 5 years. The Invesco India Financial Services Fund Direct-Growth comes under the Equity category of Invesco Mutual Fund.

Minimum Investment Amount: The minimum amount required to invest in Invesco India Financial Services Fund Direct-Growth via lump sum is ₹ 1,000.00 and via SIP is ₹ 100.00.

Min Investment Amt

₹ 1,000.00

AUM

₹ 1,811.00Cr

1Y Returns

8.28%

Expense Ratio

0.92%

Sundaram Financial Services Opportunities Fund Direct-Growth

Fund Performance: Sundaram Financial Services Opportunities Fund Direct-Growth has given 15.49% annualized returns in the past three years and 15.63% in the last 5 years. The Sundaram Financial Services Opportunities Fund Direct-Growth comes under the Equity category of Sundaram Mutual Fund.

Minimum Investment Amount: The minimum amount required to invest in Sundaram Financial Services Opportunities Fund Direct-Growth via lump sum is ₹ 100.00 and via SIP is ₹ 100.00.

Min Investment Amt

₹ 100.00

AUM

₹ 1,681.38Cr

1Y Returns

5.82%

Expense Ratio

0.86%

Kotak Banking & Financial Services Fund Direct-Growth

Fund Performance: Kotak Banking & Financial Services Fund Direct-Growth has given 14.66% annualized returns in the past three years. The Kotak Banking & Financial Services Fund Direct-Growth comes under the Equity category of Kotak Mahindra Mutual Fund.

Minimum Investment Amount: The minimum amount required to invest in Kotak Banking & Financial Services Fund Direct-Growth via lump sum is ₹ 100.00 and via SIP is ₹ 100.00.

Min Investment Amt

₹ 100.00

AUM

₹ 1,486.94Cr

1Y Returns

8.21%

Expense Ratio

0.81%

UTI Banking and Financial Services Fund Direct Plan-Growth

Fund Performance: UTI Banking and Financial Services Fund Direct Plan-Growth has given 14.11% annualized returns in the past three years and 13.25% in the last 5 years. The UTI Banking and Financial Services Fund Direct Plan-Growth comes under the Equity category of UTI Mutual Fund.

Minimum Investment Amount: The minimum amount required to invest in UTI Banking and Financial Services Fund Direct Plan-Growth via lump sum is ₹ 5,000.00 and via SIP is ₹ 500.00.

Min Investment Amt

₹ 5,000.00

AUM

₹ 1,429.59Cr

1Y Returns

5.15%

Expense Ratio

1.35%

Bandhan Financial Services Fund Direct-Growth

Fund Performance: The Bandhan Financial Services Fund Direct-Growth comes under the Equity category of Bandhan Mutual Fund.

Minimum Investment Amount: The minimum amount required to invest in Bandhan Financial Services Fund Direct-Growth via lump sum is ₹ 1,000.00 and via SIP is ₹ 100.00.

Min Investment Amt

₹ 1,000.00

AUM

₹ 1,107.29Cr

1Y Returns

3.78%

Expense Ratio

0.89%

HSBC Financial Services Fund Direct-Growth

Fund Performance: The HSBC Financial Services Fund Direct-Growth comes under the Equity category of HSBC Mutual Fund.

Minimum Investment Amount: The minimum amount required to invest in HSBC Financial Services Fund Direct-Growth via lump sum is ₹ 5,000.00 and via SIP is ₹ 500.00.

Min Investment Amt

₹ 5,000.00

AUM

₹ 926.56Cr

1Y Returns

8.97%

Expense Ratio

0.96%

Quant BFSI Fund Direct-Growth

Fund Performance: Quant BFSI Fund Direct-Growth has given 27.68% annualized returns in the past three years. The Quant BFSI Fund Direct-Growth comes under the Equity category of Quant Mutual Fund.

Minimum Investment Amount: The minimum amount required to invest in Quant BFSI Fund Direct-Growth via lump sum is ₹ 5,000.00 and via SIP is ₹ 1,000.00.

Min Investment Amt

₹ 5,000.00

AUM

₹ 837.93Cr

1Y Returns

17.67%

Expense Ratio

1.86%

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Frequently asked questions

Based on average 5-year rolling returns, the best Sectoral-Banking funds for SIP are Invesco India Financial Services Fund Direct-Growth with 5-year average rolling return of 16.84%, Tata Banking and Financial Services Fund Direct-Growth with 16.38%, and SBI Banking & Financial Services Fund Direct-Growth with 16.35%. You can start a SIP in Sectoral-Banking funds with as little as ₹99 per month.