Five-year SIP winners: Thematic mutual funds have been in the spotlight over the past few years, and PSU-focused schemes have emerged as clear winners in this space. On the 5-year SIP return chart, three PSU thematic funds have topped the category, delivering annualised returns of over 25% and turning disciplined monthly investments into sizeable wealth for investors.
PSU thematic funds top 5-year SIP charts
Among PSU-focused schemes, these three funds have stood out over the last five years with best SIP returns:
SBI PSU Fund – Direct Plan (27.30%)
A monthly SIP of Rs 10,000 in this fund has grown to around Rs 11.92 lakh in five years.
Invesco India PSU Equity Fund – Direct Plan – Growth (26.64%)
A Rs 10,000 monthly SIP here has become nearly Rs 11.72 lakh over the same period.
Aditya Birla Sun Life PSU Equity Fund – Direct Plan (25.67%)
The same Rs 10,000 SIP investment has grown to about Rs 11.47 lakh in five years.
These numbers underline how PSU thematic funds have rewarded investors who stayed invested through SIPs during a favourable cycle for public sector stocks.
What are thematic funds, and where do they fit?
Thematic funds invest around a specific theme or idea — such as PSUs, infrastructure, banking, or energy — instead of spreading money across the broader market. The biggest benefit of thematic investing is focused exposure to sectors that are expected to benefit from policy support, economic cycles or structural reforms.
However, this focus also makes thematic funds riskier than diversified equity funds. Returns can be strong when the theme works, but they can also be volatile when sentiment or policy turns unfavourable. That’s why thematic funds are generally considered suitable for investors who understand the risks and have a long-term investment horizon.
Why PSU funds have delivered strong returns
PSU funds invest primarily in government-owned companies operating in sectors such as banking, energy, power, defence and infrastructure. Over the past few years, PSU stocks have benefited from factors like balance sheet clean-ups, better profitability, government reforms, strategic disinvestment moves and renewed investor interest in value-oriented sectors.
This revival has reflected in mutual fund performance as well, pushing PSU-themed schemes to the top of SIP return charts.
SBI PSU Fund – Direct Plan: Performance and risk
Launched on January 1, 2013, SBI PSU Fund – Direct Plan invests in public sector undertakings and is benchmarked against the BSE PSU TRI. Since launch, it has delivered an annualised return of about 12%. The fund manages assets of around Rs 5,763 crore (as on November 30, 2025) and falls in the very high risk category, with an expense ratio of 0.83%.
On a lump-sum basis, the fund delivered a 30.54% return over five years, slightly below its benchmark’s 33.59% return.
From a risk perspective, the fund has a standard deviation of 21.70%, indicating high volatility. Its Sharpe ratio of 1.00 suggests reasonable risk-adjusted returns, while a Sortino ratio of 1.92 points to stronger performance relative to downside risk.
Invesco India PSU Equity Fund – Direct Plan: Performance and risk
Invesco India PSU Equity Fund – Direct Plan was also launched on January 1, 2013, and focuses on PSU stocks with the BSE PSU TRI as its benchmark. Since inception, it has delivered an annualised return of around 16.8%. The fund’s assets under management stand at about Rs 1,445 crore, and it carries a very high risk tag with an expense ratio of 0.90%.
Over five years, the fund’s lump-sum return stood at 29.31%, lower than the benchmark’s 33.59%. Its standard deviation of 22.24% reflects high volatility.
The Sharpe ratio of 0.99 indicates reasonable risk-adjusted performance, while the Sortino ratio of 1.70 shows how the fund has handled downside risks.
Aditya Birla Sun Life PSU Equity Fund – Direct Plan: Performance and risk
Launched on December 30, 2019, Aditya Birla Sun Life PSU Equity Fund – Direct Plan is another PSU-focused scheme benchmarked against the BSE PSU TRI.
Since launch, it has delivered an annualised return of about 24.7%. The fund manages assets worth nearly Rs 5,627 crore and comes with a very high risk classification. Its expense ratio is relatively lower at 0.61%.
In terms of risk metrics, the fund has a standard deviation of 21.45%, highlighting elevated volatility. Its Sharpe ratio of 0.96 suggests moderate risk-adjusted returns, while the Sortino ratio of 1.79 indicates comparatively better performance when measured against downside risk.
Why SIPs matter in thematic investing
Investing through SIPs helps smoothen the impact of market volatility, especially in high-risk categories like thematic funds. SIPs allow investors to benefit from rupee cost averaging, reduce the risk of entering the market at the wrong time, and build discipline over long periods. As seen in these PSU funds, consistent SIP investing has translated into strong wealth creation despite market ups and downs.
A word of caution for investors
While the 5-year SIP returns of PSU funds look impressive, investors should remember that past performance does not guarantee future returns. Thematic funds are closely tied to sector cycles, government policies and broader economic trends. Returns can change sharply if the underlying theme loses momentum. Factors such as valuation comfort, portfolio concentration, risk metrics and personal risk appetite should always be evaluated before investing.
For investors with a long-term horizon and the ability to handle volatility, PSU thematic funds via SIPs can play a tactical role in a portfolio — but they work best when used judiciously and alongside diversified equity funds, not as a core allocation.
Disclaimer: The above content is for informational purposes only. Mutual Fund investments are subject to market risks. Please consult your financial advisor before investing.