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Best Banking Mutual Funds 2025

Updated on July 29, 2025 , 33969 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 Mutual Funds

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

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)5 YR (%)2024 (%)
UTI Banking and Financial Services Fund Growth ₹187.568
↓ -0.28
₹1,3562.7139.617.52211.1
ICICI Prudential Banking and Financial Services Fund Growth ₹134.01
↓ -0.25
₹10,0883.112.910.517.122.211.6
Nippon India Banking Fund Growth ₹622.704
↓ -2.92
₹7,4872.112.89.419.426.610.3
TATA Banking and Financial Services Fund Growth ₹42.5733
↓ -0.12
₹2,9581.813.410.919.720.99
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 31 Jul 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 14.7% 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 (31 Jul 25) ₹187.568 ↓ -0.28   (-0.15 %)
Net Assets (Cr) ₹1,356 on 30 Jun 25
Category Equity - Sectoral
AMC UTI Asset Management Company Ltd
Rating
Risk High
Expense Ratio 2.28
Sharpe Ratio 0.65
Information Ratio 0.48
Alpha Ratio -2.61
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.

DateValue
31 Jul 20₹10,000
31 Jul 21₹15,914
31 Jul 22₹16,679
31 Jul 23₹20,037
31 Jul 24₹24,689

UTI Banking and Financial Services Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹530,691.
Net Profit of ₹230,691
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 31 Jul 25

DurationReturns
1 Month -4.1%
3 Month 2.7%
6 Month 13%
1 Year 9.6%
3 Year 17.5%
5 Year 22%
10 Year
15 Year
Since launch 14.7%
Historical performance (Yearly) on absolute basis
YearReturns
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
NameSinceTenure
Amit Premchandani16 Jun 250.04 Yr.
Preethi S2 May 223.17 Yr.

Data below for UTI Banking and Financial Services Fund as on 30 Jun 25

Equity Sector Allocation
SectorValue
Financial Services97.36%
Technology0.58%
Asset Allocation
Asset ClassValue
Cash1.83%
Equity98.17%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
ICICI Bank Ltd (Financial Services)
Equity, Since 30 Apr 04 | 532174
20%₹268 Cr1,852,344
HDFC Bank Ltd (Financial Services)
Equity, Since 31 Mar 09 | HDFCBANK
15%₹201 Cr1,005,927
Axis Bank Ltd (Financial Services)
Equity, Since 30 Jun 18 | 532215
7%₹92 Cr770,000
↑ 100,000
Bajaj Finance Ltd (Financial Services)
Equity, Since 30 Nov 19 | 500034
6%₹79 Cr842,570
↑ 674,056
State Bank of India (Financial Services)
Equity, Since 28 Feb 18 | SBIN
5%₹62 Cr750,000
Kotak Mahindra Bank Ltd (Financial Services)
Equity, Since 30 Sep 18 | KOTAKBANK
4%₹61 Cr281,165
↑ 58,194
Shriram Finance Ltd (Financial Services)
Equity, Since 31 Jan 24 | SHRIRAMFIN
4%₹57 Cr800,000
↓ -183,680
Karur Vysya Bank Ltd (Financial Services)
Equity, Since 31 Dec 18 | 590003
4%₹55 Cr2,070,787
India Shelter Finance Corporation Ltd (Financial Services)
Equity, Since 31 Dec 23 | INDIASHLTR
4%₹55 Cr625,913
↓ -34,101
Max Financial Services Ltd (Financial Services)
Equity, Since 30 Sep 22 | 500271
4%₹52 Cr314,018

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 (31 Jul 25) ₹134.01 ↓ -0.25   (-0.19 %)
Net Assets (Cr) ₹10,088 on 30 Jun 25
Category Equity - Sectoral
AMC ICICI Prudential Asset Management Company Limited
Rating
Risk High
Expense Ratio 1.98
Sharpe Ratio 0.72
Information Ratio 0.11
Alpha Ratio -0.92
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.

DateValue
31 Jul 20₹10,000
31 Jul 21₹16,665
31 Jul 22₹16,999
31 Jul 23₹20,501
31 Jul 24₹24,682

ICICI Prudential Banking and Financial Services Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹530,691.
Net Profit of ₹230,691
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 31 Jul 25

DurationReturns
1 Month -2%
3 Month 3.1%
6 Month 12.9%
1 Year 10.5%
3 Year 17.1%
5 Year 22.2%
10 Year
15 Year
Since launch 16.6%
Historical performance (Yearly) on absolute basis
YearReturns
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
NameSinceTenure
Roshan Chutkey29 Jan 187.42 Yr.
Sharmila D’mello30 Jun 223 Yr.

Data below for ICICI Prudential Banking and Financial Services Fund as on 30 Jun 25

Equity Sector Allocation
SectorValue
Financial Services92.47%
Health Care0.81%
Industrials0.33%
Asset Allocation
Asset ClassValue
Cash6.39%
Equity93.61%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
ICICI Bank Ltd (Financial Services)
Equity, Since 31 Oct 08 | 532174
20%₹2,037 Cr14,088,220
↑ 726,600
HDFC Bank Ltd (Financial Services)
Equity, Since 31 Oct 08 | HDFCBANK
17%₹1,737 Cr8,680,861
↑ 20,493
Axis Bank Ltd (Financial Services)
Equity, Since 28 Feb 19 | 532215
9%₹862 Cr7,188,596
State Bank of India (Financial Services)
Equity, Since 31 Oct 08 | SBIN
8%₹778 Cr9,489,675
SBI Life Insurance Co Ltd (Financial Services)
Equity, Since 30 Sep 17 | SBILIFE
5%₹505 Cr2,744,980
↑ 279,361
ICICI Lombard General Insurance Co Ltd (Financial Services)
Equity, Since 30 Sep 19 | ICICIGI
3%₹347 Cr1,701,240
↑ 47,478
Kotak Mahindra Bank Ltd (Financial Services)
Equity, Since 31 Jan 23 | KOTAKBANK
3%₹313 Cr1,448,500
HDFC Life Insurance Co Ltd (Financial Services)
Equity, Since 30 Sep 23 | HDFCLIFE
3%₹305 Cr3,744,946
Max Financial Services Ltd (Financial Services)
Equity, Since 31 Aug 19 | 500271
3%₹304 Cr1,848,226
↓ -54,477
IndusInd Bank Ltd (Financial Services)
Equity, Since 30 Apr 24 | INDUSINDBK
2%₹213 Cr2,445,009
↓ -1,784,000

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 20.5% 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 (31 Jul 25) ₹622.704 ↓ -2.92   (-0.47 %)
Net Assets (Cr) ₹7,487 on 30 Jun 25
Category Equity - Sectoral
AMC Nippon Life Asset Management Ltd.
Rating
Risk High
Expense Ratio 1.94
Sharpe Ratio 0.74
Information Ratio 0.9
Alpha Ratio -1.01
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.

DateValue
31 Jul 20₹10,000
31 Jul 21₹17,713
31 Jul 22₹19,070
31 Jul 23₹23,980
31 Jul 24₹29,699

Nippon India Banking Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹584,107.
Net Profit of ₹284,107
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 31 Jul 25

DurationReturns
1 Month -4.1%
3 Month 2.1%
6 Month 12.8%
1 Year 9.4%
3 Year 19.4%
5 Year 26.6%
10 Year
15 Year
Since launch 20.5%
Historical performance (Yearly) on absolute basis
YearReturns
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
NameSinceTenure
Vinay Sharma9 Apr 187.23 Yr.
Kinjal Desai25 May 187.11 Yr.
Bhavik Dave18 Jun 214.04 Yr.

Data below for Nippon India Banking Fund as on 30 Jun 25

Equity Sector Allocation
SectorValue
Financial Services94.51%
Technology2.45%
Asset Allocation
Asset ClassValue
Cash3.04%
Equity96.96%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
HDFC Bank Ltd (Financial Services)
Equity, Since 31 Jul 08 | HDFCBANK
18%₹1,324 Cr6,614,660
↓ -750,000
ICICI Bank Ltd (Financial Services)
Equity, Since 31 Oct 09 | 532174
14%₹1,043 Cr7,215,358
↓ -200,000
Axis Bank Ltd (Financial Services)
Equity, Since 30 Jun 17 | 532215
9%₹696 Cr5,800,228
State Bank of India (Financial Services)
Equity, Since 31 Mar 14 | SBIN
5%₹398 Cr4,848,932
SBI Life Insurance Co Ltd (Financial Services)
Equity, Since 30 Nov 20 | SBILIFE
4%₹310 Cr1,685,031
↑ 60,000
SBI Cards and Payment Services Ltd Ordinary Shares (Financial Services)
Equity, Since 31 Jul 20 | SBICARD
3%₹259 Cr2,720,827
IndusInd Bank Ltd (Financial Services)
Equity, Since 31 May 19 | INDUSINDBK
3%₹239 Cr2,744,975
Bajaj Finserv Ltd (Financial Services)
Equity, Since 31 Oct 23 | 532978
3%₹236 Cr1,146,038
Cholamandalam Financial Holdings Ltd (Financial Services)
Equity, Since 30 Apr 19 | CHOLAHLDNG
3%₹219 Cr1,012,694
↓ -50,000
Bank of Baroda (Financial Services)
Equity, Since 30 Apr 25 | 532134
3%₹201 Cr8,093,554
↑ 1,500,000

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 16.3% 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 (31 Jul 25) ₹42.5733 ↓ -0.12   (-0.29 %)
Net Assets (Cr) ₹2,958 on 30 Jun 25
Category Equity - Sectoral
AMC Tata Asset Management Limited
Rating Not Rated
Risk High
Expense Ratio 0
Sharpe Ratio 0.78
Information Ratio 0.78
Alpha Ratio -0.75
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.

DateValue
31 Jul 20₹10,000
31 Jul 21₹15,012
31 Jul 22₹15,076
31 Jul 23₹19,557
31 Jul 24₹23,302

TATA Banking and Financial Services Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹505,644.
Net Profit of ₹205,644
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 31 Jul 25

DurationReturns
1 Month -4.2%
3 Month 1.8%
6 Month 13.4%
1 Year 10.9%
3 Year 19.7%
5 Year 20.9%
10 Year
15 Year
Since launch 16.3%
Historical performance (Yearly) on absolute basis
YearReturns
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
NameSinceTenure
Amey Sathe14 Oct 213.71 Yr.

Data below for TATA Banking and Financial Services Fund as on 30 Jun 25

Equity Sector Allocation
SectorValue
Financial Services92.54%
Technology1.87%
Asset Allocation
Asset ClassValue
Cash5.18%
Equity94.82%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
HDFC Bank Ltd (Financial Services)
Equity, Since 31 Jan 16 | HDFCBANK
22%₹640 Cr3,200,000
Axis Bank Ltd (Financial Services)
Equity, Since 30 Nov 18 | 532215
9%₹254 Cr2,120,000
Kotak Mahindra Bank Ltd (Financial Services)
Equity, Since 31 Jan 16 | KOTAKBANK
8%₹249 Cr1,150,000
ICICI Bank Ltd (Financial Services)
Equity, Since 31 Oct 18 | 532174
8%₹241 Cr1,665,000
Bajaj Finserv Ltd (Financial Services)
Equity, Since 30 Apr 25 | 532978
3%₹97 Cr469,857
↑ 269,857
PNB Housing Finance Ltd (Financial Services)
Equity, Since 31 Oct 21 | PNBHOUSING
3%₹83 Cr750,000
State Bank of India (Financial Services)
Equity, Since 30 Nov 20 | SBIN
3%₹81 Cr990,000
ICICI Lombard General Insurance Co Ltd (Financial Services)
Equity, Since 30 Jun 19 | ICICIGI
3%₹77 Cr375,000
Bajaj Finance Ltd (Financial Services)
Equity, Since 31 Dec 24 | 500034
3%₹75 Cr800,000
↑ 640,000
Max Financial Services Ltd (Financial Services)
Equity, Since 31 Aug 20 | 500271
3%₹74 Cr450,000

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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.
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