The gap with the bank index
Over the three years to Thursday, 23 April 2026, the median banking and financial services fund returned 17.37% a year. The Nifty Bank, by our estimate of its total return, made 11.14% a year.
Every one of the 15 funds with a three-year record beat it. The weakest, Taurus Banking & Financial Services, returned 13.06% a year.
The group here is the actively managed funds in SEBI's sectoral and thematic category with "banking", "financial services" or "BFSI" in their names: 28 funds, 4 of them launched in 2026. Debt funds with "Banking and PSU" in their names are a different category and are left out. All figures are for the Direct plan, Growth option, from daily NAVs to 23 April 2026. Returns of a year or more are annualised.
The spread, period by period
| 1 year | 3 years | 5 years | 10 years | |
|---|---|---|---|---|
| Funds counted | 22 | 15 | 12 | 11 |
| Worst | 1.06% | 13.06% | 13.27% | 11.12% |
| Median | 5.81% | 17.37% | 15.66% | 15.23% |
| Best | 21.51% | 22.71% | 18.96% | 17.99% |
| Nifty Bank (est. total return) | 2.70% | 11.14% | 12.99% | 13.61% |
| Nifty Financial Services (est. total return) | 0.12% | 12.81% | 12.36% | 15.32% |
Against the Nifty Bank, 19 of 22 funds were ahead over one year, all 15 over three, all 12 over five and 9 of 11 over ten. Against the broader Nifty Financial Services, the ten-year count drops to 5 of 11.
Top and bottom over three years
| Fund (Direct, Growth) | 1 year | 3 years | 5 years | 10 years |
|---|---|---|---|---|
| Invesco India Financial Services | 10.44% | 22.71% | 18.81% | 17.63% |
| SBI Banking & Financial Services | 8.64% | 21.04% | 16.34% | 17.99% |
| Sundaram Financial Services Opportunities | 4.50% | 19.17% | 17.51% | 16.38% |
| Mirae Asset Banking and Financial Services | 7.95% | 18.73% | 16.68% | |
| … | ||||
| ITI Banking and Financial Services | 7.14% | 15.82% | ||
| ICICI Prudential Banking & Financial Services | 1.06% | 14.66% | 14.40% | 15.23% |
| LIC MF Banking and Financial Services | 5.92% | 13.22% | 13.60% | 11.12% |
| Taurus Banking & Financial Services | 1.33% | 13.06% | 13.27% | 14.25% |
The best one-year return belongs to quant BFSI, 21.51%, a fund not yet three years old.
Inside the index: two very different years
The Nifty Bank's flat year hides a split between its parts. NSE's sub-indices, over the same year to 23 April, by our estimate of total return:
| Index | 1 year | 3 years, a year |
|---|---|---|
| Nifty PSU Bank | 34.98% | 34.25% |
| Nifty MidSmall Financial Services | 29.04% | 37.26% |
| Nifty Financial Services Ex-Bank | 11.28% | 25.05% |
| Nifty Bank | 2.70% | 11.14% |
| Nifty Private Bank | −2.27% | 8.61% |
The index funds show the same split. SBI BSE PSU Bank Index returned 30.93% over the year and UTI Nifty Private Bank Index −2.82%. The eight Nifty Bank index funds with a one-year record returned between 2.16% and 2.37%.
A fund benchmarked to the Nifty Bank or Nifty Financial Services had plenty of room to beat it this way. Which parts of the sector each fund actually held is not something this post measures.
Next to diversified funds
| Median, to 23 April 2026 | Banking & financial services | Flexi Cap | Large Cap |
|---|---|---|---|
| 1 year | 5.81% | 3.84% | 2.14% |
| 3 years, a year | 17.37% | 17.47% | 15.32% |
| 5 years, a year | 15.66% | 14.74% | 13.59% |
| 10 years, a year | 15.23% | 14.88% | 13.36% |
| Volatility, 3 years | 15.39% | 13.72% | 13.07% |
Over three years the sector funds and flexi caps finished level. The sector funds were ahead over the other three windows, by about one to two points a year, and swung more to get there.
This year has been rough for both. The median banking fund older than 2026 was down 3.20% for the year on 23 April, against 3.66% for flexi caps and 5.47% for large caps.
What this does not tell you
One sector is a concentrated bet. These funds hold one part of the economy. A diversified fund spreads the same money across many.
The index comparison is our estimate. We don't hold NSE's official total return indices. Ours add the daily dividend yield to the price index and can differ by a few tenths of a point a year.
Past returns and no advice. A sector that led over three years can lag over the next three. Nothing in this post is a recommendation to buy or sell any fund.
Where to go from here
The sectoral and thematic fund page lists every sector fund. Banking and financial services funds explains how the category works, and sectoral and thematic funds covers the risks of a one-sector fund.
For how the bank index is valued, see the Nifty Bank P/B in March. For the diversified side in full, see flexi-cap fund returns in April.
Frequently asked questions
How have banking and financial services funds performed?
To 23 April 2026, the median actively managed banking and financial services fund (Direct plan, Growth option) returned 5.81% over one year (22 funds), 17.37% a year over three years (15 funds), 15.66% a year over five years (12 funds) and 15.23% a year over ten years (11 funds).
Do banking funds beat the Nifty Bank index?
Over the periods to 23 April 2026, nearly all did. All 15 funds with a three-year record beat our estimate of the Nifty Bank's total return, 11.14% a year, and all 12 with five years beat its 12.99% a year. Over one year, 19 of 22 beat its 2.70%.
Are banking sector funds better than flexi-cap funds?
Over three years to 23 April 2026 they were level: a median of 17.37% a year for banking and financial services funds against 17.47% for flexi caps. The sector funds were ahead over one, five and ten years, with higher volatility, 15.39% a year against 13.72%.
This is commentary on published data, not investment advice. WealthTicker is not a SEBI-registered adviser or distributor. Figures are WealthTicker’s own calculations from public data — AMFI’s fund NAVs and disclosures, NSE’s index and FII/DII files, and the fund houses’ monthly portfolios (how we calculate). They are as of the dates stated and can be revised by their source.
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