+91-22-48913909Best Banking Mutual Funds 2026
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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Fund Selection Methodology used to find 4 funds
Best Banking Sector Mutual Funds FY 26 - 27
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2025 (%) UTI Banking and Financial Services Fund Growth ₹185.133
↓ -0.05 ₹1,350 -9.4 -7.2 12.4 11.9 16.3 ICICI Prudential Banking and Financial Services Fund Growth ₹126.18
↑ 0.02 ₹10,589 -8.9 -9.9 -3.5 10.6 10.7 15.9 Nippon India Banking Fund Growth ₹617.453
↑ 0.34 ₹7,470 -8.1 -7 0.7 13.8 14.9 17.4 TATA Banking and Financial Services Fund Growth ₹42.0439
↑ 0.11 ₹3,043 -8.3 -7.4 0.5 13.1 12.2 17.5 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 20 May 26 Research Highlights & Commentary of 4 Funds showcased
Commentary UTI Banking and Financial Services Fund ICICI Prudential Banking and Financial Services Fund Nippon India Banking Fund TATA Banking and Financial Services Fund Point 1 Bottom quartile AUM (₹1,350 Cr). Highest AUM (₹10,589 Cr). Upper mid AUM (₹7,470 Cr). Lower mid AUM (₹3,043 Cr). Point 2 Established history (22+ yrs). Established history (17+ yrs). Oldest track record among peers (23 yrs). Established history (10+ yrs). Point 3 Rating: 3★ (upper mid). Top rated. Rating: 3★ (lower mid). Not Rated. Point 4 Risk profile: High. Risk profile: High. Risk profile: High. Risk profile: High. Point 5 5Y return: 11.91% (lower mid). 5Y return: 10.72% (bottom quartile). 5Y return: 14.88% (top quartile). 5Y return: 12.23% (upper mid). Point 6 3Y return: 12.36% (lower mid). 3Y return: 10.56% (bottom quartile). 3Y return: 13.75% (top quartile). 3Y return: 13.09% (upper mid). Point 7 1Y return: 0.00% (lower mid). 1Y return: -3.54% (bottom quartile). 1Y return: 0.74% (top quartile). 1Y return: 0.46% (upper mid). Point 8 Alpha: 3.06 (top quartile). Alpha: -1.72 (bottom quartile). Alpha: 3.04 (upper mid). Alpha: 1.95 (lower mid). Point 9 Sharpe: -0.05 (top quartile). Sharpe: -0.29 (bottom quartile). Sharpe: -0.06 (upper mid). Sharpe: -0.11 (lower mid). Point 10 Information ratio: 0.47 (lower mid). Information ratio: 0.20 (bottom quartile). Information ratio: 0.86 (top quartile). Information ratio: 0.54 (upper mid). UTI Banking and Financial Services Fund
ICICI Prudential Banking and Financial Services Fund
Nippon India Banking Fund
TATA Banking and Financial Services Fund
*above is the list of top Banking & Financial Services mutual funds having AUM/Net Assets higher than 500 Crore.
(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. Below is the key information for UTI Banking and Financial Services Fund Returns up to 1 year are on 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. Research Highlights for ICICI Prudential Banking and Financial Services Fund Below is the key information for ICICI Prudential Banking and Financial Services Fund Returns up to 1 year are on 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. Research Highlights for Nippon India Banking Fund Below is the key information for Nippon India Banking Fund Returns up to 1 year are on 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. Research Highlights for TATA Banking and Financial Services Fund Below is the key information for TATA Banking and Financial Services Fund Returns up to 1 year are on 1. UTI Banking and Financial Services Fund
UTI Banking and Financial Services Fund
Growth Launch Date 7 Apr 04 NAV (20 May 26) ₹185.133 ↓ -0.05 (-0.03 %) Net Assets (Cr) ₹1,350 on 30 Apr 26 Category Equity - Sectoral AMC UTI Asset Management Company Ltd Rating ☆☆☆ Risk High Expense Ratio 2.2 Sharpe Ratio -0.05 Information Ratio 0.47 Alpha Ratio 3.06 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 30 Apr 21 ₹10,000 30 Apr 22 ₹10,751 30 Apr 23 ₹12,316 30 Apr 24 ₹15,628 30 Apr 25 ₹17,775 30 Apr 26 ₹18,200 Returns for UTI Banking and Financial Services Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 20 May 26 Duration Returns 1 Month -4.2% 3 Month -9.4% 6 Month -7.2% 1 Year 3 Year 12.4% 5 Year 11.9% 10 Year 15 Year Since launch 14.1% Historical performance (Yearly) on absolute basis
Year Returns 2025 16.3% 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% Fund Manager information for UTI Banking and Financial Services Fund
Name Since Tenure Amit Premchandani 16 Jun 25 0.87 Yr. Bhavesh Kanani 12 Jan 26 0.3 Yr. Data below for UTI Banking and Financial Services Fund as on 30 Apr 26
Equity Sector Allocation
Sector Value Financial Services 95.31% Technology 1.56% Asset Allocation
Asset Class Value Cash 3.13% Equity 96.87% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Ltd (Financial Services)
Equity, Since 31 Mar 09 | HDFCBANK16% ₹222 Cr 2,875,000
↑ 625,000 ICICI Bank Ltd (Financial Services)
Equity, Since 30 Apr 04 | ICICIBANK13% ₹176 Cr 1,395,000
↓ -60,000 Kotak Mahindra Bank Ltd (Financial Services)
Equity, Since 30 Sep 18 | KOTAKBANK9% ₹125 Cr 3,250,000 Bajaj Finance Ltd (Financial Services)
Equity, Since 30 Nov 19 | 5000348% ₹106 Cr 1,135,000
↑ 240,000 Axis Bank Ltd (Financial Services)
Equity, Since 30 Jun 18 | 5322158% ₹104 Cr 820,000
↓ -290,000 Shriram Finance Ltd (Financial Services)
Equity, Since 31 Jan 24 | SHRIRAMFIN5% ₹67 Cr 712,975
↑ 50,000 State Bank of India (Financial Services)
Equity, Since 28 Feb 18 | SBIN5% ₹64 Cr 600,000 SBI Life Insurance Co Ltd (Financial Services)
Equity, Since 28 Feb 25 | SBILIFE4% ₹50 Cr 277,000
↑ 167,000 Multi Commodity Exchange of India Ltd (Financial Services)
Equity, Since 31 Mar 24 | MCX3% ₹45 Cr 150,000 Bajaj Finserv Ltd (Financial Services)
Equity, Since 31 Aug 24 | 5329783% ₹43 Cr 246,000 2. ICICI Prudential Banking and Financial Services Fund
ICICI Prudential Banking and Financial Services Fund
Growth Launch Date 22 Aug 08 NAV (20 May 26) ₹126.18 ↑ 0.02 (0.02 %) Net Assets (Cr) ₹10,589 on 30 Apr 26 Category Equity - Sectoral AMC ICICI Prudential Asset Management Company Limited Rating ☆☆☆☆☆ Risk High Expense Ratio 1.83 Sharpe Ratio -0.29 Information Ratio 0.2 Alpha Ratio -1.72 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 30 Apr 21 ₹10,000 30 Apr 22 ₹11,335 30 Apr 23 ₹12,627 30 Apr 24 ₹15,525 30 Apr 25 ₹18,186 30 Apr 26 ₹17,827 Returns for ICICI Prudential Banking and Financial Services Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 20 May 26 Duration Returns 1 Month -3.6% 3 Month -8.9% 6 Month -9.9% 1 Year -3.5% 3 Year 10.6% 5 Year 10.7% 10 Year 15 Year Since launch 15.4% Historical performance (Yearly) on absolute basis
Year Returns 2025 15.9% 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% Fund Manager information for ICICI Prudential Banking and Financial Services Fund
Name Since Tenure Sharmila D'Silva 30 Jun 22 3.84 Yr. Antariksha Banerjee 2 Mar 26 0.16 Yr. Data below for ICICI Prudential Banking and Financial Services Fund as on 30 Apr 26
Equity Sector Allocation
Sector Value Financial Services 95.9% Health Care 0.93% Industrials 0.29% Technology 0.26% Asset Allocation
Asset Class Value Cash 2.52% Equity 97.48% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Ltd (Financial Services)
Equity, Since 31 Oct 08 | HDFCBANK16% ₹1,477 Cr 20,194,031 ICICI Bank Ltd (Financial Services)
Equity, Since 31 Oct 08 | ICICIBANK14% ₹1,338 Cr 11,094,643 Axis Bank Ltd (Financial Services)
Equity, Since 28 Feb 19 | 5322159% ₹873 Cr 7,518,679
↑ 985,000 Kotak Mahindra Bank Ltd (Financial Services)
Equity, Since 31 Jan 23 | KOTAKBANK6% ₹564 Cr 15,957,386
↑ 2,853,989 SBI Life Insurance Co Ltd (Financial Services)
Equity, Since 30 Sep 17 | SBILIFE5% ₹477 Cr 2,685,881
↓ -550,534 State Bank of India (Financial Services)
Equity, Since 31 Oct 08 | SBIN5% ₹429 Cr 4,384,950
↑ 450,000 LIC Housing Finance Ltd (Financial Services)
Equity, Since 30 Nov 24 | LICHSGFIN4% ₹337 Cr 6,799,870 HDFC Life Insurance Co Ltd (Financial Services)
Equity, Since 30 Sep 23 | HDFCLIFE3% ₹310 Cr 5,241,538 SBI Cards and Payment Services Ltd Ordinary Shares (Financial Services)
Equity, Since 30 Nov 25 | SBICARD3% ₹305 Cr 4,799,326
↓ -209,984 ICICI Lombard General Insurance Co Ltd (Financial Services)
Equity, Since 30 Sep 19 | ICICIGI3% ₹305 Cr 1,782,062
↓ -18,266 3. Nippon India Banking Fund
Nippon India Banking Fund
Growth Launch Date 26 May 03 NAV (20 May 26) ₹617.453 ↑ 0.34 (0.06 %) Net Assets (Cr) ₹7,470 on 30 Apr 26 Category Equity - Sectoral AMC Nippon Life Asset Management Ltd. Rating ☆☆☆ Risk High Expense Ratio 1.89 Sharpe Ratio -0.06 Information Ratio 0.86 Alpha Ratio 3.04 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 30 Apr 21 ₹10,000 30 Apr 22 ₹12,230 30 Apr 23 ₹13,893 30 Apr 24 ₹18,318 30 Apr 25 ₹20,986 30 Apr 26 ₹21,416 Returns for Nippon India Banking Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 20 May 26 Duration Returns 1 Month -3.5% 3 Month -8.1% 6 Month -7% 1 Year 0.7% 3 Year 13.8% 5 Year 14.9% 10 Year 15 Year Since launch 19.6% Historical performance (Yearly) on absolute basis
Year Returns 2025 17.4% 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% Fund Manager information for Nippon India Banking Fund
Name Since Tenure Vinay Sharma 9 Apr 18 8.07 Yr. Kinjal Desai 25 May 18 7.94 Yr. Bhavik Dave 18 Jun 21 4.87 Yr. Amber Singhania 11 Mar 26 0.14 Yr. Data below for Nippon India Banking Fund as on 30 Apr 26
Equity Sector Allocation
Sector Value Financial Services 94.81% Technology 2.77% Asset Allocation
Asset Class Value Cash 2.41% Equity 97.59% Top Securities Holdings / Portfolio
Name Holding Value Quantity HDFC Bank Ltd (Financial Services)
Equity, Since 31 Jul 08 | HDFCBANK13% ₹974 Cr 12,619,320 ICICI Bank Ltd (Financial Services)
Equity, Since 31 Oct 09 | ICICIBANK13% ₹952 Cr 7,538,887 Axis Bank Ltd (Financial Services)
Equity, Since 30 Jun 17 | 5322159% ₹686 Cr 5,408,065
↓ -163,918 State Bank of India (Financial Services)
Equity, Since 31 Mar 14 | SBIN6% ₹445 Cr 4,165,352 Kotak Mahindra Bank Ltd (Financial Services)
Equity, Since 31 Jul 23 | KOTAKBANK4% ₹263 Cr 6,872,870 SBI Cards and Payment Services Ltd Ordinary Shares (Financial Services)
Equity, Since 31 Jul 20 | SBICARD3% ₹251 Cr 3,893,792 SBI Life Insurance Co Ltd (Financial Services)
Equity, Since 30 Nov 20 | SBILIFE3% ₹246 Cr 1,350,199 Bajaj Finserv Ltd (Financial Services)
Equity, Since 31 Oct 23 | 5329783% ₹223 Cr 1,275,773 Multi Commodity Exchange of India Ltd (Financial Services)
Equity, Since 30 Apr 24 | MCX3% ₹205 Cr 690,540 Cholamandalam Financial Holdings Ltd (Financial Services)
Equity, Since 30 Apr 19 | CHOLAHLDNG3% ₹199 Cr 1,279,877
↓ -83,026 4. TATA Banking and Financial Services Fund
TATA Banking and Financial Services Fund
Growth Launch Date 28 Dec 15 NAV (20 May 26) ₹42.0439 ↑ 0.11 (0.27 %) Net Assets (Cr) ₹3,043 on 30 Apr 26 Category Equity - Sectoral AMC Tata Asset Management Limited Rating Risk High Expense Ratio 1.98 Sharpe Ratio -0.11 Information Ratio 0.54 Alpha Ratio 1.95 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 30 Apr 21 ₹10,000 30 Apr 22 ₹10,453 30 Apr 23 ₹12,351 30 Apr 24 ₹15,699 30 Apr 25 ₹18,189 30 Apr 26 ₹18,402 Returns for TATA Banking and Financial Services Fund
absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 20 May 26 Duration Returns 1 Month -4% 3 Month -8.3% 6 Month -7.4% 1 Year 0.5% 3 Year 13.1% 5 Year 12.2% 10 Year 15 Year Since launch 14.8% Historical performance (Yearly) on absolute basis
Year Returns 2025 17.5% 2024 9% 2023 22% 2022 16.9% 2021 11.9% 2020 2.7% 2019 25.7% 2018 -0.1% 2017 45% 2016 17.8% Fund Manager information for TATA Banking and Financial Services Fund
Name Since Tenure Kapil Malhotra 31 Oct 25 0.5 Yr. Data below for TATA Banking and Financial Services Fund as on 30 Apr 26
Equity Sector Allocation
Sector Value Financial Services 95.59% Technology 2.42% Asset Allocation
Asset Class Value Cash 1.99% Equity 98.01% Top Securities Holdings / Portfolio
Name Holding Value Quantity ICICI Bank Ltd (Financial Services)
Equity, Since 31 Oct 18 | ICICIBANK13% ₹394 Cr 3,120,000
↓ -135,000 HDFC Bank Ltd (Financial Services)
Equity, Since 31 Jan 16 | HDFCBANK11% ₹338 Cr 4,380,000
↓ -1,620,000 State Bank of India (Financial Services)
Equity, Since 30 Nov 20 | SBIN10% ₹303 Cr 2,832,000 Axis Bank Ltd (Financial Services)
Equity, Since 30 Nov 18 | 5322159% ₹275 Cr 2,170,000 Shriram Finance Ltd (Financial Services)
Equity, Since 31 Jan 26 | SHRIRAMFIN5% ₹137 Cr 1,464,000
↑ 90,000 Kotak Mahindra Bank Ltd (Financial Services)
Equity, Since 30 Apr 26 | KOTAKBANK4% ₹126 Cr 3,300,000
↑ 3,300,000 SBI Life Insurance Co Ltd (Financial Services)
Equity, Since 31 Jul 25 | SBILIFE4% ₹122 Cr 672,000
↑ 90,000 HDFC Asset Management Co Ltd (Financial Services)
Equity, Since 30 Apr 26 | HDFCAMC4% ₹116 Cr 429,000
↑ 429,000 PNB Housing Finance Ltd (Financial Services)
Equity, Since 31 Oct 21 | PNBHOUSING3% ₹82 Cr 780,000
↑ 30,000 360 One Wam Ltd Ordinary Shares (Financial Services)
Equity, Since 30 Apr 26 | 360ONE3% ₹81 Cr 780,000
↑ 780,000
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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.
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Research Highlights for UTI Banking and Financial Services Fund