PSU Thematic Mutual Funds Lose Up to 13% in 3-Month; All Eyes on Budget 2025

Public Sector Undertaking (PSU)-themed mutual funds, which focus on investments in state-owned enterprises, have garnered attention for their unique positioning in the market. However, the past three months have posed challenges, with several funds recording negative returns. 

Recent Performance Trends

Over the past three months, PSU-themed mutual funds have struggled, with losses of up to 13% as of January 9, 2024. A closer look at individual funds reveals the extent of this downturn:

• Quant PSU Fund, launched in February 2024, recorded the steepest decline at 13.24%.
  • Category: Sectoral/Thematic Fund
  • Fund Size: ₹849.94 crore
  • Expense Ratio: 0.83%
  • NAV (as of January 9, 2025): ₹10.26
  • Equity Allocation: 81.33% in domestic equities
    • Large Cap: 50.82%
    • Mid Cap: 12.5%
    • Small Cap: 1.72%
  • Debt Allocation: 0.58%, entirely in government securities
• CPSE ETF, a passive fund mirroring the PSU theme, experienced a decline of approximately 14.4% as of January 10, 2025. 

Other funds also reported negative returns during the same period:

• Aditya Birla Sun Life PSU Equity Fund: -11%
• Invesco India PSU Equity Fund: -9.75%
• ICICI Prudential PSU Equity Fund: -9.08%
• SBI PSU Fund: -8.6%

Note: Performance as of January 9, 2025. 

Long-Term Performance Snapshot

Despite short-term challenges, PSU-themed mutual funds have demonstrated resilience over a longer horizon, with decent returns in the past year:

• SBI PSU Fund:
  • Fund Size: ₹4,572.13 crore
  • 1-Year Return: 21.65%
• ICICI Prudential PSU Equity Fund:
  • Fund Size: ₹2,142.71 crore
  • 1-Year Return: 21.12%
• Invesco India PSU Equity Fund:
  • Fund Size: ₹1,344.86 crore
  • 1-Year Return: 20.66%

Note: Performance as of January 9, 2025. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.