Keeping an eye on the latest market trends and developments is essential to planning your investments wisely. If India sees growth in sectors like banking and financial services, investing in sectoral mutual funds that focus on industries like banks, NBFCs, insurance companies and other financial institutions can be a strategic investment decision. There is a possibility that In this article, we will discuss the best banking sector mutual funds to invest in in 2024.
How does the Banking and Financial Services Fund work?
Mutual funds focused on the BFSI sector typically allocate investments across two major industries: the core banking sector and the financial services sector. As per SEBI mandate, this kind of sectoral fund has to invest 80% of his AUM in banking and financial services companies.
Unlike other sectoral funds, banking sector funds are considered to be safer as the banking and financial services industry is governed by regulatory authorities such as SEBI, RBI, IRDAI, PFRDA. Therefore, unethical behavior and bad corporate operations are less likely to occur than in this industry. Under strict management and governance.
Many asset management companies have introduced sector-specific mutual funds focused on banking and financial services to capitalize on opportunities within this thematic category. Recently, Groww Mutual Fund (previously known as Indiabulls) also launched a banking and financial services mutual fund.
Top Banks and Financial Services Funds
The following is Up Banking and Financial Services FundInvestment Objective and Fund Performance.
#1 – Invesco India Financial Services Fund
It is one of the county’s top banking and financial services mutual funds. The minimum investment in SIP is Rs.100 in lump sum, Rs.1000 and the expense ratio is 1.08% (inclusive of GST).
#2 – Aditya Birla Sun Life Banking and Financial Services Fund
Aditya Birla Sun Life Fund was established on November 25, 2013 and has delivered an annualized return of 18.71% since then. This fund has a 1% exit load if withdrawn within 30 days of investment.
#3 – ICICI Prudential Banking and Financial Services Fund
It is a banking and financial sector fund by ICICI Prudential AMC, one of India’s largest and well-known financial services companies. The equity sector allocation includes 86.3% financial services, 12.4% insurance, and 1.3% other.
#4 – Sundaram Financial Services Opportunity Fund
Sundaram Financial Services Opportunity Fund launched on 1stcent Founded in January 2013, it is one of India’s most dynamic funds in the financial services sector. He has achieved a return of 14.68% since inception and the five-year return was 19.4%. This fund’s expense ratio is 0.79%.
#5 – Japan Bank of India Financial Services Fund
Currently, the fund has assets under management of Rs 5,192 million with a five-year return of 14.9%. An investor can start his SIP with a minimum of Rs 100 and his expense ratio will be 1.11% and exit load will be 1% of his NAV if withdrawn within 30 days of investment.
Investment trusts in the banking sector | 5 year return (%) | Since founding (%) |
---|---|---|
Invesco India Financial Services Fund | 16.9 | 19.10 |
Aditya Birla Sun Life Banking and Financial Services Fund | 14.9 | 18.81 |
ICICI Prudential Banking and Financial Services Fund | 12.5. | 18.40 |
Sundaram Financial Services Opportunity Fund | 19.4 | 18.14 |
Japan Bank of India Financial Services Fund | 14.9 | 17.82 |
Why invest in banking sector mutual funds 2024?
Rather than going with the flow and blindly investing in the best banking and financial services funds., It’s important to understand the reasons behind the hype, including:
Capitalize on improvements and growth in the banking sector
The banking and financial services sector is improving its financial health by reducing NPAs (non-performing assets) and strengthening balance sheets. By reducing non-performing assets, we are better equipped to support economic growth in the near future.
strong government reform
Government reforms have strengthened the banking and financial services system. Initiatives like Aadhaar, Pradhan Mantri Jan Dhan Yojana, Mobile Trinity and UPI have been launched to promote financial inclusion.
Join India’s fast-growing economy
The Indian economy is experiencing the fastest economic growth among the major developed and emerging economies. Furthermore, the World Bank has raised India’s GDP forecast for 2022-23 to 6.9% from 6.5% as of October 2022.
Evolution and growth of fintech
The financial services sector is expanding through market penetration and digitization. The evolution of fintech is expected to enhance financial inclusion and expand the reach of the banking sector in rural areas of the country, as has already been demonstrated.
Conclusion: We hope you now have some understanding about India’s top banks and financial services funds. Mutual funds focused on the banking and financial services sector have performed very well recently. This is primarily due to increased adoption of digital banking, reduction of non-performing assets (NPAs), and streamlining of M&A among banks and fintech companies. In the future, performance can be further improved by optimizing the NPA ratio and increasing digital transactions within the sector.

