Sep 29, 2023

​PSU funds top return chart in 2023. Should you invest?

Parvathi P, ET Online

​PSU funds top return chart in 2023. Should you invest?

​Funds that invest in the public sector undertaking are topping the performance chart in 2023. These schemes have offered 28.92% returns in this year so far.

Image Source: iStock

​What are PSU funds?

​PSU funds are thematic funds that invest in stocks of public sector undertakings or PSUs. These companies are government-owned. So they are influenced by government policies on sectors they are operating.

Image Source: iStock

​Why are PSU funds up?

​According to Puneet Oberoi, financial planner and director at Finwise Services, the high momentum is due to investors anticipating ownership shifts in public sector companies from government to private sector.

Image Source: iStock

​Hopes of privatisation?

​Many market participants are hoping for large privatisation efforts from the government. The process of disinvestment has already started and it is at different levels, say market pundits.

Image Source: iStock

Will the run sustain?

​Oberoi said that the run is expected to last for one and half years till the major shifts of ownership happen in the public sector. He says that it will sustain for a longer time if big names take over these companies.

Image Source: iStock

​Who should invest?

​An investor who is willing to stay up to eight to ten years can invest in thematic PSU funds. “I recommend these funds to people who have an experience in investing in equities for the past five to seven years and eight years, who have stayed through market cycles, and who understand that you have to hold and stay as these funds have a history of giving negative returns for a long period of time,” says Oberoi.

Image Source: iStock

​Top 5 performers

CPSE ETF : 52.99%SBI PSU Fund : 48.68%Aditya Birla SL PSU Equity Fund : 47.41%Invesco India PSU Equity Fund : 42.21%ICICI Pru PSU Equity Fund : 30.99%

Image Source: iStock

Thanks For Reading!

Next: Do very large equity funds beat their benchmarks?

Read Next