Top 5 Performing PSU Mutual Funds

Introduction

When you think about investing in India's growth story, government-backed enterprises deserve serious consideration. Public Sector Undertakings (PSUs) have become one of the most compelling investment themes, and mutual funds built around them offer significant wealth-creation opportunities.

This blog highlights the five best-performing PSU mutual funds in India today.

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Overview of PSU Mutual Funds

1) Invesco India PSU Equity Fund

Launch: November 18, 2009

• 3-year CAGR: 31.14%
• Since inception annualised returns: 17.12%
• SIP Performance: ₹1,000 monthly for 10 years (Nov 2015) would grow ₹1,20,000 to ₹3,89,010 (224% return)

This fund is known for consistent execution and effective downside protection, making it attractive for long-term investors.

2) SBI PSU Fund

Launch: July 07, 2010

• 3-year CAGR: 30.13%
• Since launch (2013) annualised returns: 12.07%
• AUM: ₹5,762 crore

SBI PSU Fund provides exposure to India's critical sectors, backed by SBI's research team. Its size ensures liquidity and fund management flexibility.

3) ABSL PSU Equity Fund

Launch: December 30, 2019

• 3-year CAGR: 28.09%
• Expense ratio: 0.61% (lowest among the top 5)

ABSL delivers impressive performance despite its shorter history, with a cost advantage that compounds significantly over long-term investments.

4) ICICI Prudential PSU Equity Fund

Launch: September 12, 2022

• 2-year CAGR: 30.38%
• 3-year CAGR: 29.51%
• 1-year return: 2.52%
• AUM: ₹1,931.96 crore
• Expense ratio: 0.87%, Exit load: 0.005%

Despite being the youngest fund, it has demonstrated strong momentum and efficient fund management, gaining investor confidence quickly.

Conclusion

PSU mutual funds provide access to government-backed companies with solid financials that drive Indian economic development. Returns depend on government reforms, capital expenditure, and improving PSU efficiency.

Investors benefit most by staying invested long-term to endure market fluctuations. Selecting a fund with effective management and diversifying investments according to portfolio goals can help maximise PSU mutual fund returns, while avoiding concentration in a single fund.