Best SBI equity fund in 10 years: 390% absolute returns; Rs 10,000 SIP grows to Rs 35.5 lakh

Among the many equity schemes offered by SBI Mutual Fund, one fund has stood out for its strong long-term performance. SBI PSU Fund – Direct Plan has delivered impressive returns over the years and has emerged as one of the top performers when SIP and lump sum returns are compared across different timeframes. The fund stands out because it has delivered over 20% annualised returns on SIP investments across the 3-year, 5-year and 10-year periods. Among more than 80 active equity schemes offered by SBI Mutual Fund, this is the only fund that has managed to achieve this consistency across all three timeframes. Over the last 10 years, the fund has delivered about 390% absolute returns, reflecting the strong rally seen in PSU stocks in recent years. SIP returns: How Rs 10,000 monthly investment grew A systematic investment plan (SIP) in the fund has delivered strong long-term results. 3-year SIP return: 23.92% CAGR A Rs 10,000 monthly SIP started three years ago would have grown to around Rs 5.2 lakh today, showing strong gains during the recent PSU rally. 5-year SIP return: 28.56% CAGR A Rs 10,000 SIP started five years ago would have grown to about Rs 12.05 lakh, reflecting strong performance during the recovery phase after the pandemic. 10-year SIP return: 20.64% CAGR A Rs 10,000 SIP started ten years ago would have turned into around Rs 35.5 lakh, highlighting the power of long-term compounding. (Data: Value Research, Amfi) Lump sum returns: Performance across different periods The fund has also delivered strong returns for investors who invested through lump sum. 1-year return: 31.43% An investment of Rs 1 lakh one year ago would now be worth around Rs 1.31 lakh. 3-year return: 34.05% CAGR A Rs 1 lakh investment made three years ago would have grown to around Rs 2.4 lakh. 5-year return: 28.19% CAGR An investment of Rs 1 lakh over five years would now be worth about Rs 3.46 lakh. 10-year return: 17.21% CAGR A Rs 1 lakh investment made 10 years ago would have grown to around Rs 4.9 lakh today. Overall, the fund has delivered about 390% absolute returns over the last decade. Basic details about SBI PSU Fund The SBI PSU Fund – Direct Plan was launched on January 1, 2013 by SBI Mutual Fund. It is an open-ended equity scheme that mainly invests in public sector undertaking (PSU) companies. Benchmark: BSE PSU TRI Assets under management: Rs 5,980 crore (as of January 31, 2026) Expense ratio: 0.80% (as of February 28, 2026) Return since launch: Around 12.54% Because the fund invests largely in PSU stocks, it falls under the ‘Very High’ risk category. Understanding the fund’s risk profile Investors should also understand the risk metrics behind the fund’s performance. Risk level: Very High PSU stocks can be volatile and often move based on government policy changes, sector cycles and market sentiment. Mean return: 34.41% This represents the fund’s average return over time, showing strong historical performance. Standard deviation: 20.96% This indicates how much returns fluctuate. A higher number means the fund can see sharp ups and downs. Sharpe ratio: 1.35 This measures risk-adjusted returns. A ratio above 1 generally indicates that the fund has delivered good returns relative to the risk taken. Sortino ratio: 2.31 This focuses on downside volatility, showing how the fund performs during negative market movements. Beta: 0.93 A beta close to 1 suggests the fund moves broadly in line with the market. Alpha: 1.82 A positive alpha indicates the fund has generated returns higher than its benchmark. Portfolio exposure: Where the fund invests The portfolio shows a strong tilt towards PSU companies in the energy and financial sectors. The Energy and Utilities sector accounts for about 43.48% of the portfolio, which is higher than the category average. These include companies involved in power generation, transmission and oil and gas. The Financial sector makes up around 34.08% of the fund’s investments, reflecting exposure to PSU banks and financial institutions. The Industrials sector accounts for about 12.42%, while the Materials sector contributes around 7.01%. Overall, the fund’s portfolio remains heavily concentrated in energy and financial PSU companies. Top company holdings in the portfolio Some of the key companies in the fund’s portfolio include: SBI – 17.88% Bharat Electronics – 9.74% NTPC – 9.19% Power Grid – 8.55% GAIL (India) – 8.15% Bharat Petroleum – 5.91% Bank of Baroda – 5.51% NMDC – 3.79% Indian Bank – 3.70% Oil India – 3.28% These holdings highlight the fund’s focus on large PSU companies across banking, energy and infrastructure sectors. A word of caution for investors While the fund’s returns look impressive, investors should not select a mutual fund based only on past returns. Market performance can change, and past performance does not guarantee similar results in the future. Before investing, it is important to evaluate risk level, investment horizon, portfolio diversification, fund strategy and consistency of performance. Sector-focused funds like PSU funds can deliver strong returns during favourable cycles but may also experience sharp volatility during market downturns. Investors should therefore align investments with their financial goals, risk tolerance and long-term strategy before choosing any mutual fund.