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Top Banking and Financial Sectoral Mutual Funds have attracted the attention of investors looking for focused exposure to India’s banking and financial services sector.
The banking and financial services sector plays a crucial role in India’s economic growth. As credit demand, digital banking, insurance penetration, and financial inclusion continue to evolve, investors often look at banking and financial sectoral mutual funds for focused exposure to this important part of the economy.
For investors searching for sector-specific opportunities, banking and financial sectoral mutual funds can offer a way to participate in the growth of banks, NBFCs, insurance companies, and other financial businesses. However, these funds also carry higher concentration risk because their performance depends heavily on one sector.
Based on the data provided, the following Top 3 Banking and Financial Sectoral Mutual Funds have delivered positive returns in each year from 2022 through July 20, 2026.
Note: The data and returns mentioned in this article are based on the information provided and are as of July 20, 2026. Mutual fund returns are subject to market risks and past performance does not guarantee future results.
Top Banking and Financial Sectoral Mutual Funds: Top 3 Picks
| Fund | AUM | Expense Ratio | 2022 Return | 2023 Return | 2024 Return | 2026 Return* |
| ITI Banking and Financial Services Fund | ₹381.16 Cr | 3.05% | 9.34% | 14.57% | 6.71% | 0.49% |
| HDFC Banking & Financial Services Fund | ₹4,582.3 Cr | 1.95% | 15.13% | 21.45% | 9.88% | 0.59% |
| Invesco India Financial Services Fund | ₹1,811 Cr | 2.20% | 12.81% | 25.99% | 19.84% | 1.38% |
*Returns as of July 20, 2026, based on the supplied data.
1. ITI Banking and Financial Services Fund
The ITI Banking and Financial Services Fund was launched on December 7, 2021. The fund has an AUM of ₹381.16 crore and an expense ratio of 3.05%.
According to the provided data, the fund delivered a 9.34% return in 2022, followed by 14.57% in 2023. In 2024, it generated a return of 6.71%. As of July 20, 2026, the fund recorded a return of 0.49%.
The fund’s NAV stood at ₹16.2516 as of July 20, 2026.
For investors considering banking and financial sectoral mutual funds, this fund is one of the options to keep on the radar. However, investors should carefully evaluate its expense ratio, portfolio allocation, risk level, and long-term performance before making an investment decision.
2. HDFC Banking & Financial Services Fund
The HDFC Banking & Financial Services Fund was initiated on July 1, 2021. With an AUM of ₹4,582.3 crore, it is the largest fund by AUM among the three funds featured in this list. Its expense ratio is 1.95%.
The fund delivered a 15.13% return in 2022 and gained momentum with a 21.45% return in 2023. In 2024, it recorded a return of 9.88%. As of July 20, 2026, the fund reported a return of 0.59%.
The fund’s NAV was ₹18.189 as of July 20, 2026.
Its relatively lower expense ratio compared with the other two funds may be an important factor for investors to consider. However, expense ratio alone should not be the deciding factor. Investors should also examine the fund’s investment strategy, portfolio holdings, risk profile, and consistency across different market cycles.
3. Invesco India Financial Services Fund
The Invesco India Financial Services Fund was launched on July 14, 2008, making it the oldest fund among the three featured here. The fund has an AUM of ₹1,811 crore and an expense ratio of 2.2%.
The fund generated a 12.81% return in 2022, followed by a strong 25.99% return in 2023. It continued its positive performance in 2024, delivering 19.84%. As of July 20, 2026, the fund recorded a return of 1.38%.
The fund’s NAV stood at ₹147.68 as of July 20, 2026.
Based on the supplied figures, the Invesco India Financial Services Fund recorded the highest 2026 return among the three funds, at 1.38% as of July 20, 2026. Its performance in 2023 and 2024 was also notable compared with the other funds in this list.
Read More: Top 3 Performing Thematic International Funds with Returns up to 43.74% in Last 1 Year!
What Makes Banking and Financial Sectoral Mutual Funds Interesting?
The Indian financial sector has witnessed significant changes over the years, including rapid digital adoption, expanding access to financial services, and growing demand for credit and investment products. These developments can create opportunities for companies operating across banking and financial services.
However, banking and financial sectoral mutual funds are concentrated investments. Unlike diversified equity funds, these schemes focus primarily on a specific sector. This means they may experience greater volatility when the banking and financial sector faces challenges such as rising interest rates, asset-quality concerns, regulatory changes, or economic slowdowns.
Therefore, investors should consider their risk appetite, investment horizon, financial goals, and overall portfolio diversification before investing.
Final Takeaway
The three banking and financial sectoral mutual funds discussed above have delivered positive returns across the years highlighted in the supplied data, from 2022 through July 20, 2026. The ITI Banking and Financial Services Fund, HDFC Banking & Financial Services Fund, and Invesco India Financial Services Fund each offer investors focused exposure to the financial services theme.
While historical performance can help investors understand how a fund has performed in the past, it should not be treated as a guarantee of future returns. Investors should review the latest factsheets, portfolio holdings, expense ratios, risk factors, and fund objectives before investing.
Looking to invest smarter? 4R Investments can help you understand market opportunities and make informed investment decisions based on your financial goals and risk profile.
Disclaimer
The above calculations are illustrative in nature and based on assumed returns. Mutual fund investments are subject to market risks. Investors should consult a financial advisor before making investment decisions.
For investment guidance and Demat account assistance, contact:
4R Investments
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Disclaimer
Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.
Past performance is no guarantee of future results. Mutual Funds do not have a fixed rate of return, and it is not possible to predict the rate of return.
Mutual Funds are not Exchange traded products, and the AOL is just acting as distributor. Please note that all disputes with respect to the distribution activity would not have access to Exchange investor redressal forum or Arbitration mechanism.
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