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Best Banking Mutual Funds 2025

Updated on April 21, 2025 , 33862 views

Since 2016 banking funds are catching the eye of investors. After underperforming in 2015, banking sector funds performed strongly in last two years. In the year 2017, banking, funds have given 31 percent returns. With such good performance, many investors are inclining towards Investing in these schemes.

Banking funds are those Mutual Funds that invest the majority of their funds in the Banking and Financial Services sector. It is basically a sector Equity Fund. But, one should know that sector funds can outperform the broader Market by a big margin when the economic and market conditions are favourable for the sector. At the same time, sector funds can Underperform considerably when the market conditions are unfavourable. It is always advised to the investors that they should avoid these funds unless the timing of entry is suitable.

Why Invest in Banking Mutual Funds?

Ideally, banking funds are considered as a good option over a long investment horizon, across different market conditions. Over the last five years, these funds gave average annualized returns of more than 17 percent. So, even though these funds shouldn't be the only fund on your Portfolio, you can add banking funds to your portfolio to get exposure to one of the fastest growing sectors of the Indian Economy.

As banking and finance sector is considered to be the country’s one of the backbone, it may result in the development of the country, especially in the case where the government is also supporting the sector. So, it can be assumed that in the future this can be a win-win situation for investors if they get any opportunity to participate in this fund. However, a risk-averse investor should avoid investing in such high risk sectors or funds.

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Best Banking Sector Mutual Funds FY 25 - 26

Fund	NAV	Net Assets (Cr)	3 MO (%)	6 MO (%)	1 YR (%)	3 YR (%)	5 YR (%)	2024 (%)
UTI Banking and Financial Services Fund Growth	₹186.607 ↓ -0.50	₹1,211	14.8	7.4	19	18.7	24.3	11.1
ICICI Prudential Banking and Financial Services Fund Growth	₹129.8 ↓ -0.36	₹9,008	11.6	5.2	18.5	16.8	24.3	11.6
Nippon India Banking Fund Growth	₹617.734 ↓ -1.52	₹6,566	13.9	6.8	18.4	20.1	29.2	10.3
TATA Banking and Financial Services Fund Growth	₹42.3433 ↓ -0.17	₹2,548	14.4	7.8	20.3	20.5	22.7	9
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 23 Apr 25

*above is the list of top Banking & Financial Services mutual funds having AUM/Net Assets higher than 500 Crore.

1. UTI Banking and Financial Services Fund

(Erstwhile UTI Banking Sector Fund)

Investment objective is "capital appreciation" through investments in the stocks of the companies/institutions engaged in the banking and financial services activities.

UTI Banking and Financial Services Fund is a Equity - Sectoral fund was launched on 7 Apr 04. It is a fund with High risk and has given a CAGR/Annualized return of 14.9% since its launch. Ranked 20 in Sectoral category. Return for 2024 was 11.1% , 2023 was 19.5% and 2022 was 15.1% .

Below is the key information for UTI Banking and Financial Services Fund

UTI Banking and Financial Services Fund Growth
Launch Date	7 Apr 04
NAV (23 Apr 25)	₹186.607 ↓ -0.50 (-0.27 %)
Net Assets (Cr)	₹1,211 on 31 Mar 25
Category	Equity - Sectoral
AMC	UTI Asset Management Company Ltd
Rating	☆☆☆
Risk	High
Expense Ratio	2.28
Sharpe Ratio	0.55
Information Ratio	0.29
Alpha Ratio	-6.11
Min Investment	5,000
Min SIP Investment	500
Exit Load	0-1 Years (1%),1 Years and above(NIL)

Growth of 10,000 investment over the years.

Date	Value
31 Mar 20	₹10,000
31 Mar 21	₹17,413
31 Mar 22	₹18,931
31 Mar 23	₹20,398
31 Mar 24	₹25,837
31 Mar 25	₹29,643

UTI Banking and Financial Services Fund SIP Returns

Total investment amount is ₹300,000
expected amount after 5 Years is ₹556,833.
Net Profit of ₹256,833 Invest Now

Returns for UTI Banking and Financial Services Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 23 Apr 25

Duration	Returns
1 Month	7.6%
3 Month	14.8%
6 Month	7.4%
1 Year	19%
3 Year	18.7%
5 Year	24.3%
10 Year
15 Year
Since launch	14.9%

Historical performance (Yearly) on absolute basis

Year	Returns
2024	11.1%
2023	19.5%
2022	15.1%
2021	14.3%
2020	-5.3%
2019	11.6%
2018	-6.8%
2017	43.5%
2016	13%
2015	-11.3%

Fund Manager information for UTI Banking and Financial Services Fund

Name	Since	Tenure
Preethi S	2 May 22	2.83 Yr.

Data below for UTI Banking and Financial Services Fund as on 31 Mar 25

Equity Sector Allocation

Sector	Value
Financial Services	95.39%
Technology	0.08%

Asset Allocation

Asset Class	Value
Cash	4.54%
Equity	95.46%

Top Securities Holdings / Portfolio

Name	Holding	Value	Quantity
ICICI Bank Ltd (Financial Services) Equity, Since 30 Apr 04 \| ICICIBANK	18%	₹202 Cr	1,675,000
HDFC Bank Ltd (Financial Services) Equity, Since 31 Mar 09 \| HDFCBANK	16%	₹174 Cr	1,005,927
Axis Bank Ltd (Financial Services) Equity, Since 30 Jun 18 \| 532215	6%	₹68 Cr	670,000
Shriram Finance Ltd (Financial Services) Equity, Since 31 Jan 24 \| SHRIRAMFIN	5%	₹61 Cr	983,680
India Shelter Finance Corporation Ltd (Financial Services) Equity, Since 31 Dec 23 \| INDIASHLTR	5%	₹52 Cr	714,617
State Bank of India (Financial Services) Equity, Since 28 Feb 18 \| SBIN	5%	₹52 Cr	750,000
Bajaj Finance Ltd (Financial Services) Equity, Since 30 Nov 19 \| 500034	4%	₹49 Cr	57,257 ↑ 15,000
HDFC Life Insurance Co Ltd (Financial Services) Equity, Since 31 Jul 24 \| HDFCLIFE	4%	₹42 Cr	697,890
Karur Vysya Bank Ltd (Financial Services) Equity, Since 31 Dec 18 \| 590003	3%	₹38 Cr	1,876,541
Max Financial Services Ltd (Financial Services) Equity, Since 30 Sep 22 \| 500271	3%	₹31 Cr	314,018

2. ICICI Prudential Banking and Financial Services Fund

ICICI Prudential Banking and Financial Services Fund is an Open-ended equity scheme that seeks to generate long-term capital appreciation to unitholders from a portfolio that is invested predominantly in equity and equity related securities of companies engaged in banking and financial services. However, there can be no assurance that the investment objective of the Scheme will be realized.

ICICI Prudential Banking and Financial Services Fund is a Equity - Sectoral fund was launched on 22 Aug 08. It is a fund with High risk and has given a CAGR/Annualized return of 16.6% since its launch. Return for 2024 was 11.6% , 2023 was 17.9% and 2022 was 11.9% .

Below is the key information for ICICI Prudential Banking and Financial Services Fund

ICICI Prudential Banking and Financial Services Fund Growth
Launch Date	22 Aug 08
NAV (23 Apr 25)	₹129.8 ↓ -0.36 (-0.28 %)
Net Assets (Cr)	₹9,008 on 31 Mar 25
Category	Equity - Sectoral
AMC	ICICI Prudential Asset Management Company Limited
Rating	☆☆☆☆☆
Risk	High
Expense Ratio	1.98
Sharpe Ratio	0.59
Information Ratio	0.07
Alpha Ratio	-4.45
Min Investment	5,000
Min SIP Investment	100
Exit Load	0-1 Years (1%),1 Years and above(NIL)

Growth of 10,000 investment over the years.

Date	Value
31 Mar 20	₹10,000
31 Mar 21	₹17,701
31 Mar 22	₹19,901
31 Mar 23	₹21,205
31 Mar 24	₹26,444
31 Mar 25	₹30,205

ICICI Prudential Banking and Financial Services Fund SIP Returns

Total investment amount is ₹300,000
expected amount after 5 Years is ₹556,833.
Net Profit of ₹256,833 Invest Now

Returns for ICICI Prudential Banking and Financial Services Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 23 Apr 25

Duration	Returns
1 Month	7.3%
3 Month	11.6%
6 Month	5.2%
1 Year	18.5%
3 Year	16.8%
5 Year	24.3%
10 Year
15 Year
Since launch	16.6%

Historical performance (Yearly) on absolute basis

Year	Returns
2024	11.6%
2023	17.9%
2022	11.9%
2021	23.5%
2020	-5.5%
2019	14.5%
2018	-0.4%
2017	45.1%
2016	21.1%
2015	-7.2%

Fund Manager information for ICICI Prudential Banking and Financial Services Fund

Name	Since	Tenure
Roshan Chutkey	29 Jan 18	7.09 Yr.
Sharmila D’mello	30 Jun 22	2.67 Yr.

Data below for ICICI Prudential Banking and Financial Services Fund as on 31 Mar 25

Equity Sector Allocation

Sector	Value
Financial Services	92.1%
Industrials	0.18%
Technology	0.07%

Asset Allocation

Asset Class	Value
Cash	7.65%
Equity	92.35%

Top Securities Holdings / Portfolio

Name	Holding	Value	Quantity
HDFC Bank Ltd (Financial Services) Equity, Since 31 Oct 08 \| HDFCBANK	21%	₹1,887 Cr	10,891,127
ICICI Bank Ltd (Financial Services) Equity, Since 31 Oct 08 \| ICICIBANK	18%	₹1,619 Cr	13,445,003
Axis Bank Ltd (Financial Services) Equity, Since 28 Feb 19 \| 532215	8%	₹730 Cr	7,188,596 ↑ 173,125
State Bank of India (Financial Services) Equity, Since 31 Oct 08 \| SBIN	6%	₹568 Cr	8,244,914 ↑ 1,706,850
SBI Life Insurance Co Ltd (Financial Services) Equity, Since 30 Sep 17 \| SBILIFE	5%	₹477 Cr	3,332,802 ↑ 255,647
IndusInd Bank Ltd (Financial Services) Equity, Since 30 Apr 24 \| INDUSINDBK	5%	₹433 Cr	4,371,007
HDFC Life Insurance Co Ltd (Financial Services) Equity, Since 30 Sep 23 \| HDFCLIFE	4%	₹330 Cr	5,423,546 ↑ 984,400
Kotak Mahindra Bank Ltd (Financial Services) Equity, Since 31 Jan 23 \| KOTAKBANK	3%	₹284 Cr	1,491,184 ↓ -480,000
ICICI Lombard General Insurance Co Ltd (Financial Services) Equity, Since 30 Sep 19 \| ICICIGI	3%	₹236 Cr	1,396,761 ↑ 311,863
Max Financial Services Ltd (Financial Services) Equity, Since 31 Aug 19 \| 500271	2%	₹169 Cr	1,697,397 ↑ 34,116

3. Nippon India Banking Fund

The primary investment objective of the Scheme is to seek to generate continuous returns by actively investing in equity and equity related securities of companies in the Banking Sector and companies engaged in allied activities related to Banking Sector. The AMC will have the discretion to completely or partially invest in any of the type of securities stated above with a view to maximize the returns or on defensive considerations. However, there can be no assurance that the investment objective of the Scheme will be realized, as actual market movements may be at variance with anticipated trends.

Nippon India Banking Fund is a Equity - Sectoral fund was launched on 26 May 03. It is a fund with High risk and has given a CAGR/Annualized return of 20.7% since its launch. Ranked 15 in Sectoral category. Return for 2024 was 10.3% , 2023 was 24.2% and 2022 was 20.7% .

Below is the key information for Nippon India Banking Fund

Nippon India Banking Fund Growth
Launch Date	26 May 03
NAV (23 Apr 25)	₹617.734 ↓ -1.52 (-0.25 %)
Net Assets (Cr)	₹6,566 on 31 Mar 25
Category	Equity - Sectoral
AMC	Nippon Life Asset Management Ltd.
Rating	☆☆☆
Risk	High
Expense Ratio	1.94
Sharpe Ratio	0.46
Information Ratio	0.54
Alpha Ratio	-6.4
Min Investment	5,000
Min SIP Investment	100
Exit Load	0-1 Years (1%),1 Years and above(NIL)

Growth of 10,000 investment over the years.

Date	Value
31 Mar 20	₹10,000
31 Mar 21	₹17,796
31 Mar 22	₹21,684
31 Mar 23	₹23,468
31 Mar 24	₹31,409
31 Mar 25	₹35,338

Nippon India Banking Fund SIP Returns

Total investment amount is ₹300,000
expected amount after 5 Years is ₹627,226.
Net Profit of ₹327,226 Invest Now

Returns for Nippon India Banking Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 23 Apr 25

Duration	Returns
1 Month	9%
3 Month	13.9%
6 Month	6.8%
1 Year	18.4%
3 Year	20.1%
5 Year	29.2%
10 Year
15 Year
Since launch	20.7%

Historical performance (Yearly) on absolute basis

Year	Returns
2024	10.3%
2023	24.2%
2022	20.7%
2021	29.7%
2020	-10.6%
2019	10.7%
2018	-1.2%
2017	44.1%
2016	11.5%
2015	-6%

Fund Manager information for Nippon India Banking Fund

Name	Since	Tenure
Vinay Sharma	9 Apr 18	6.98 Yr.
Kinjal Desai	25 May 18	6.85 Yr.
Bhavik Dave	18 Jun 21	3.79 Yr.

Data below for Nippon India Banking Fund as on 31 Mar 25

Equity Sector Allocation

Sector	Value
Financial Services	95.28%
Technology	2.81%

Asset Allocation

Asset Class	Value
Cash	1.91%
Equity	98.09%

Top Securities Holdings / Portfolio

Name	Holding	Value	Quantity
HDFC Bank Ltd (Financial Services) Equity, Since 31 Jul 08 \| HDFCBANK	21%	₹1,311 Cr	7,564,660 ↓ -150,000
ICICI Bank Ltd (Financial Services) Equity, Since 31 Oct 09 \| ICICIBANK	16%	₹953 Cr	7,915,358
Axis Bank Ltd (Financial Services) Equity, Since 30 Jun 17 \| 532215	10%	₹589 Cr	5,800,228
State Bank of India (Financial Services) Equity, Since 31 Mar 14 \| SBIN	5%	₹307 Cr	4,459,330
IndusInd Bank Ltd (Financial Services) Equity, Since 31 May 19 \| INDUSINDBK	4%	₹260 Cr	2,627,608
SBI Cards and Payment Services Ltd Ordinary Shares (Financial Services) Equity, Since 31 Jul 20 \| SBICARD	4%	₹228 Cr	2,720,827
Bajaj Finserv Ltd (Financial Services) Equity, Since 31 Oct 23 \| 532978	4%	₹215 Cr	1,146,038
Kotak Mahindra Bank Ltd (Financial Services) Equity, Since 31 Jul 23 \| KOTAKBANK	3%	₹201 Cr	1,055,000 ↓ -455,000
Cholamandalam Financial Holdings Ltd (Financial Services) Equity, Since 30 Apr 19 \| CHOLAHLDNG	3%	₹191 Cr	1,160,355
SBI Life Insurance Co Ltd (Financial Services) Equity, Since 30 Nov 20 \| SBILIFE	3%	₹186 Cr	1,300,170

4. TATA Banking and Financial Services Fund

The investment objective of the scheme is to seek long term capital appreciation by investing atleast 80% of its net assets in equity/equity related instruments of the companies in the Banking and Financial Services sector in India.

TATA Banking and Financial Services Fund is a Equity - Sectoral fund was launched on 28 Dec 15. It is a fund with High risk and has given a CAGR/Annualized return of 16.7% since its launch. Return for 2024 was 9% , 2023 was 22% and 2022 was 16.9% .

Below is the key information for TATA Banking and Financial Services Fund

TATA Banking and Financial Services Fund Growth
Launch Date	28 Dec 15
NAV (23 Apr 25)	₹42.3433 ↓ -0.17 (-0.40 %)
Net Assets (Cr)	₹2,548 on 31 Mar 25
Category	Equity - Sectoral
AMC	Tata Asset Management Limited
Rating	Not Rated
Risk	High
Expense Ratio	0
Sharpe Ratio	0.68
Information Ratio	0.5
Alpha Ratio	-3.79
Min Investment	5,000
Min SIP Investment	150
Exit Load	0-3 Months (0.25%),3 Months and above(NIL)

Growth of 10,000 investment over the years.

Date	Value
31 Mar 20	₹10,000
31 Mar 21	₹16,155
31 Mar 22	₹17,035
31 Mar 23	₹18,867
31 Mar 24	₹23,596
31 Mar 25	₹27,532

TATA Banking and Financial Services Fund SIP Returns

Total investment amount is ₹300,000
expected amount after 5 Years is ₹530,691.
Net Profit of ₹230,691 Invest Now

Returns for TATA Banking and Financial Services Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 23 Apr 25

Duration	Returns
1 Month	9.4%
3 Month	14.4%
6 Month	7.8%
1 Year	20.3%
3 Year	20.5%
5 Year	22.7%
10 Year
15 Year
Since launch	16.7%

Historical performance (Yearly) on absolute basis

Year	Returns
2024	9%
2023	22%
2022	16.9%
2021	11.9%
2020	2.7%
2019	25.7%
2018	-0.1%
2017	45%
2016	17.8%
2015

Fund Manager information for TATA Banking and Financial Services Fund

Name	Since	Tenure
Amey Sathe	14 Oct 21	3.46 Yr.

Data below for TATA Banking and Financial Services Fund as on 31 Mar 25

Equity Sector Allocation

Sector	Value
Financial Services	96.96%
Technology	1.72%

Asset Allocation

Asset Class	Value
Cash	1.31%
Equity	98.69%

Top Securities Holdings / Portfolio

Name	Holding	Value	Quantity
HDFC Bank Ltd (Financial Services) Equity, Since 31 Jan 16 \| HDFCBANK	24%	₹554 Cr	3,200,000
Kotak Mahindra Bank Ltd (Financial Services) Equity, Since 31 Jan 16 \| KOTAKBANK	10%	₹219 Cr	1,150,000
Axis Bank Ltd (Financial Services) Equity, Since 30 Nov 18 \| 532215	9%	₹203 Cr	2,000,000
ICICI Bank Ltd (Financial Services) Equity, Since 31 Oct 18 \| ICICIBANK	9%	₹200 Cr	1,665,000
SBI Cards and Payment Services Ltd Ordinary Shares (Financial Services) Equity, Since 31 Mar 20 \| SBICARD	3%	₹74 Cr	880,000
State Bank of India (Financial Services) Equity, Since 30 Nov 20 \| SBIN	3%	₹68 Cr	990,000
Bajaj Finance Ltd (Financial Services) Equity, Since 31 Dec 24 \| 500034	3%	₹60 Cr	70,000
PNB Housing Finance Ltd (Financial Services) Equity, Since 31 Oct 21 \| PNBHOUSING	3%	₹57 Cr	750,000
ICICI Lombard General Insurance Co Ltd (Financial Services) Equity, Since 30 Jun 19 \| ICICIGI	2%	₹55 Cr	325,000
HDFC Life Insurance Co Ltd (Financial Services) Equity, Since 31 Jul 19 \| HDFCLIFE	2%	₹52 Cr	850,000 ↑ 50,000

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Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.