SBI Funds Outshine Volatile Market with Over 15% Returns
Overview
Five SBI equity mutual funds have demonstrated exceptional performance, consistently delivering over 15% returns across 1, 3, 5, and 10-year periods. This achievement is significant given the widespread market volatility and muted returns across most equity categories in the past year. The funds highlight specific sectors like banking, PSU, and commodities, while also including diversified options.
SBI Funds Achieve Stellar Returns
Several State Bank of India (SBI) equity mutual funds have bucked the trend of muted market performance, with five direct plans consistently delivering returns exceeding 15% across multiple timeframes. This feat is particularly noteworthy as the past year saw significant volatility, with many equity categories struggling to achieve even double-digit returns.
Market Headwinds Faced by Equity Funds
The equity market over the last year presented a challenging environment. Smallcap funds, for instance, remained in negative territory for the 1-year period due to heavy selling. Broader categories like midcap, flexicap, multicap, and large & midcap funds also saw only partial recovery, failing to cross the 10% return mark. Largecap funds provided around 11.65% returns, while select sectoral pockets such as banking and auto funds posted strong gains of 26.52% and 20.55% respectively. Value-oriented funds offered approximately 11.27% returns.
Top Performing SBI Equity Funds
Amidst this difficult backdrop, the following five SBI equity funds stood out:
- SBI Focused Fund: This fund, managing over ₹43,000 crore, follows a high-conviction strategy with a concentrated portfolio. It achieved returns of 20.20% in one year and a CAGR of 19.97% over three years, 17.32% over five years, and 16.59% over ten years. It is classified as very high risk due to its concentrated nature but has managed volatility well.
- SBI Large & Midcap Fund: With assets exceeding ₹37,000 crore, this fund blends stability and growth by investing across large and midcap stocks. It posted 15.88% in one year and impressive CAGRs of 18.83% (3-year), 19.18% (5-year), and 16.26% (10-year). The fund is deemed very high risk due to midcap exposure.
- SBI Banking & Financial Services Fund: This sectoral fund captured the strong performance of banking and financial stocks, delivering 28.90% in one year. Its long-term CAGRs are equally robust: 21.22% (3-year), 17.11% (5-year), and 19.24% (10-year). It carries a very high-risk profile due to its sector-specific focus.
- SBI PSU Fund: Benefiting from the rally in public sector undertaking (PSU) stocks, this fund delivered 21.34% in one year and outstanding CAGRs of 29.67% (3-year) and 29.06% (5-year), along with 15.50% over ten years. It is a very high-risk fund influenced by government policies.
- SBI Commodity Fund: This fund has shown steady performance across all timeframes, with a 19.77% return in one year and CAGRs around 17-18% for 3, 5, and 10 years. It remains a niche, cyclical investment with a very high-risk profile tied to global commodity cycles.
Investor Caution Advised
While these past performances are strong, investors are reminded that past returns are not the sole criterion for selecting mutual funds. Market cycles, sector leadership, and investment strategies can shift, leading to future underperformance. A thorough assessment of risk appetite, investment horizon, and financial goals is crucial before investing, especially in high-risk sectoral and thematic funds.
