SBI PSU Fund is an open-ended equity mutual fund scheme managed by SBI Mutual Fund. The fund primarily invests in equity and equity-related instruments of Public Sector Undertakings (PSUs) and their subsidiaries, aiming for long-term capital appreciation.
Fund Overview:
- Launch Date: July 7, 2010
- Fund Type: Open-ended Equity Scheme
- Benchmark: S&P BSE PSU TRI
- Risk Level: Very High (as per SEBI’s Riskometer)
- Current NAV: ₹31.54
- Assets Under Management (AUM): ₹4,788.77 crore
Expense Ratio:
- Regular Plan: 1.91%
- Direct Plan: 0.96%
Minimum Investment:
- Lump Sum: ₹5,000
- Systematic Investment Plan (SIP): ₹500 per installment
SBI PSU Fund Share Price
- Direct Plan – Growth Option: ₹31.54
- Regular Plan – Growth Option: ₹28.7233
The NAV represents the per-unit market value of the fund’s assets and is updated daily based on the performance of its underlying investments.
Fund Managers of SBI PSU Fun
The SBI PSU Fund is currently managed by Mr. Rohit Shimpi, who has been overseeing the fund since September 2021.
About the Fund Manager:
- Educational Qualifications: Mr. Shimpi holds a Bachelor of Commerce (B.Com) degree, a Post Graduate Diploma in Business Management (PGDBM) with a specialization in Finance, and is a Chartered Financial Analyst (CFA).
- Professional Experience: Prior to joining SBI Mutual Fund, Mr. Shimpi accumulated experience at organizations such as CNBC TV18, JP Morgan’s offshore research center, and HDFC Standard Life Insurance.
Under Mr. Shimpi’s management, the SBI PSU Fund continues to focus on investing predominantly in equity and equity-related instruments of Public Sector Undertakings (PSUs) and their subsidiaries, aiming for long-term capital appreciation.
SBI PSU Fund Portfolio
The SBI PSU Fund primarily invests in equity and equity-related instruments of Public Sector Undertakings (PSUs). Below is a detailed overview of its portfolio as of March 31, 2025:
Top Equity Holdings:
| Company | Sector | Allocation (%) |
| State Bank of India | Financial Services | 13.82 |
| GAIL (India) Ltd. | Gas Transmission/Marketing | 9.84 |
| Power Grid Corporation of India Ltd. | Power – Transmission | 9.18 |
| Bharat Electronics Ltd. | Aerospace & Defense | 8.54 |
| NTPC Ltd. | Power Generation | 8.02 |
| Bharat Petroleum Corporation Ltd. | Refineries & Marketing | 5.64 |
| Bank of Baroda | Public Sector Bank | 5.25 |
| NMDC Ltd. | Industrial Minerals | 4.01 |
| General Insurance Corporation of India | General Insurance | 3.65 |
| Oil India Ltd. | Oil Exploration & Production | 3.11 |
Sector Allocation:
| Sector | Allocation (%) |
| Financial Services | 35.9 |
| Utilities | 24.13 |
| Energy | 17.02 |
| Capital Goods | 8.54 |
| Metals & Mining | 4.01 |
Asset Allocation:
- Equity: 94.07%
- Cash & Equivalents: 5.81%
- Treasury Bills: 0.12%
Market Capitalization Exposure:
- Large Cap Stocks: 66.09%
- Mid Cap Stocks: 22.58%
- Small Cap Stocks: 2.9%
Recent Portfolio Changes (March 2025):
- New Addition: Gujarat Gas Ltd. was added with an allocation of 1.03%.
Conclusion:
The SBI PSU Fund maintains a concentrated portfolio with significant investments in the financial services and energy sectors, focusing on large-cap PSUs. Investors should consider this sectoral concentration when evaluating the fund’s alignment with their investment objectives and risk tolerance.
Pros of SBI PSU Fund
1) Strong Long-Term Returns
- The fund has delivered solid returns over 3- and 5-year periods, outperforming many peers and benchmarks during PSU rallies.
2) Beneficiary of Government Reforms
- PSU-focused funds can benefit from government-led initiatives like infrastructure investment, disinvestment, Make in India, and energy transition.
3) Undervalued Stocks Potential
- PSUs are considered undervalued relative to private peers. The fund captures value investing opportunities.
4) Experienced Fund Management
- Managed by Rohit Shimpi, a seasoned professional with a strong background in finance and equity research.
5) Sectoral Opportunity Play
- Allows investors to bet on cyclical uptrends in sectors like banking, oil & gas, power, and defense which are dominated by PSUs.
Cons of SBI PSU Fund
1) High Sectoral/Stock Concentration
- Heavily invested in a few sectors like financials, energy, and utilities, which increases risk during downturns.
2) Volatile and Cyclical Performance
- Returns can be inconsistent and heavily dependent on macroeconomic and political factors.
3) Limited Diversification
- As a thematic fund, it lacks the diversification of a broader equity or hybrid fund, making it riskier.
4) Policy Dependence
- Performance is often linked to government actions—privatization, budget allocations, or reforms—which may not always go as expected.
5) Not for Conservative Investors
- With its “Very High” risk classification, this fund isn’t suitable for short-term or low-risk investors.
Investment Considerations:
- Sector Concentration: The fund’s focus on PSUs results in sector-specific exposure, which may lead to higher volatility compared to more diversified equity funds.
- Government Influence: Performance can be impacted by government policies and reforms related to public sector enterprises.
- Investment Horizon: Suitable for investors with a long-term perspective who are comfortable with the inherent risks associated with sectoral/thematic funds.
Conclusion:
The SBI PSU Fund offers an opportunity to invest in India’s public sector enterprises, which may benefit from government initiatives and reforms.
However, the fund’s concentrated exposure to PSUs means it may experience higher volatility and is best suited for investors with a high-risk tolerance and a long-term investment horizon.
SBI PSU Fund Returns
Performance Overview:
| Time Period | Absolute Returns | Annual Returns | Category Average | Rank within Category |
| 1 Year | -4.13 | -4.13 | -0.75 | 125/176 |
| 2 Years | 89.53 | 37.43 | 21.42 | 4/140 |
| 3 Years | 102.70 | 26.50 | 13.57 | 3/129 |
| 5 Years | 262.17 | 29.34 | 24.42 | 28/107 |
| 10 Years | 193.28 | 11.35 | 11.81 | 52/80 |
| Since Inception | 185.24 | 7.36 | 7.22 | 132/195 |
SIP Returns:
| Time Period | Total Investment | Latest Value | Absolute Returns | Annual Returns |
| 1 Year | 12,000 | 11,041.77 | -7.99 | -14.46 |
| 2 Years | 24,000 | 28,431.81 | 18.47 | 17.21 |
| 3 Years | 36,000 | 52,256.30 | 45.16 | 25.74 |
| 5 Years | 60,000 | 119,455.64 | 99.09 | 27.94 |
| 10 Years | 120,000 | 290,182.82 | 141.82 | 16.82 |
Key Points:
- Recent Performance: The fund has experienced a short-term decline, with a 1-year return of -4.13%, underperforming the category average of -0.75%.
- Long-Term Growth: Over longer periods, the fund has demonstrated strong performance, notably a 5-year annualized return of 29.34%, surpassing the category average of 24.42%.
- SIP Investment: Systematic Investment Plans have yielded significant returns over extended periods, with a 10-year annualized return of 16.82%.
Conclusion:
While the SBI PSU Fund has faced recent short-term challenges, its long-term performance remains robust. Investors should consider their investment horizon and risk tolerance, keeping in mind the fund’s focus on Public Sector Undertakings (PSUs), which may lead to sector-specific risks.
Strengths of SBI PSU Fund
1) Strong Long-Term Performance
- Has delivered impressive 3- and 5-year returns, particularly during PSU sector rallies.
- Benefited from the post-COVID recovery and government capital expenditure push.
2) Backed by Government Policies
- PSUs often gain from favorable policy reforms, infrastructure spending, and disinvestment plans.
- The fund leverages sectors where the government plays a dominant role like banking, energy, and defense.
3) Experienced Fund Management
- Managed by Rohit Shimpi, who brings sector-specific expertise and a focused investment strategy.
4) Attractive Valuations
- Many PSU stocks are still undervalued relative to private peers, offering value investing opportunities.
5) Concentrated Bets Can Outperform
- In favorable market conditions, its focused exposure to a rising PSU sector can lead to outsized gains compared to diversified funds.
Risks of SBI PSU Fund
1) High Sector and Stock Concentration
- Heavy exposure to a few sectors (Financials, Energy, Utilities) makes the fund more volatile and less diversified.
2) Policy-Driven Performance
- PSUs are highly sensitive to political and regulatory decisions. Changes in government stance or delays in reforms can hurt returns.
3) Cyclicality
- Performance may swing with economic cycles—the fund tends to do well in bull markets but may underperform during downturns.
4) Short-Term Volatility
- Recent returns have been negative (1-year return ~ -4.8%), showing susceptibility to market sentiment and sectoral downturns.
5) Not Suitable for Conservative Investors
- Classified as “Very High Risk”, making it inappropriate for investors seeking stability or short-term gains.
Conclusion:
- Long-term investors (5+ years)
- Those with high risk tolerance
- Investors looking to capitalize on India’s PSU turnaround story
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