- Will it be good to invest in Banking & PSU Debt Funds in the current market situation?
- Experts say ‘YES’ - Read this post to know why they vouch for investment in these funds
The faith and trust in PSU or public sector units or nationalized banks have never been stronger than what it is today. Post the YES Bank fiasco, PSU banks have witnessed a surge in deposits and interest from people. This is not to say that all private sector banks will go the Yes bank route, in fact, most of the private banks in India are in a healthy state.
This has spilled over to mutual funds as well. SBI mutual fund has seen the largest inflows in the last year or so among top mutual fund companies and has gone on to become the biggest mutual fund in the country displacing HDFC Mutual Fund. This is one part of the story.
The other part is that most of the mutual fund companies-private or PSU has dedicated debt funds that invest only in PSU bonds. All such funds have also seen a sharp spike in inflows in the recent past. These three are the best PSU bank mutual funds to invest your money in:
|Name of the fund||Last 1-year returns (in %)||Net assets (in crores)|
|Axis Banking & PSU debt fund||10||13,709|
|Kotak Banking & PSU debt fund||11||5,528|
|IDFC Banking & PSU debt fund||12||13,956|
As we can see in the last one year all these funds have given a return of 10% + which is a superb return in a safe category like PSU bank mutual fund. The question arises – whether it is a good time to invest in these funds given the current market situation?
Yes, it certainly is! We would advise you to invest a certain % of your fixed income or debt portfolio which would be parked in fixed deposits or other debt schemes to be shifted to these funds. Please note that past performance might not be repeated. But given the economic situation, these funds will outperform most of the other debt funds albeit with a lower risk as well.