Groww Banking and Financial Services Fund

Groww Banking and Financial Services Fund delivered a 1Y SIP XIRR of 11.48%, slightly below the category average of 12.13%. Its 1Y rolling return of 11.56% is broadly in line with its XIRR, indicating consistent returns across entry points. Calendar year returns show a decelerating trend, from 12.29% in 2024 to 10.41% in 2025 and -2.25% in 2026 so far.

The fund's maximum drawdown of just -0.16% with a recovery period of 84 days suggests remarkably low recent volatility, though 3 drawdown events exceeding 10% historically indicate the sector can experience sharp corrections. The 1Y Calmar ratio of 0.6549 reflects moderate risk-adjusted returns. As a sectoral fund concentrated in financials, investors should expect higher volatility than diversified funds over full market cycles.

The portfolio holds 38 stocks with the top 10 accounting for roughly 36% of NAV, led by Kotak Mahindra Bank (4.63%) and Axis Bank (4.46%). Sector exposure is heavily concentrated in Banks (28.7%), Finance (23.6%), and Capital Markets (17.1%), with a meaningful 8.6% allocation to Fintech including One 97 Communications. Notably, CarTrade Tech (4.18%) is a Retailing stock, suggesting some flexibility beyond pure financials.

The fund's 1Y XIRR of 11.48% trails the category average of 12.13%, placing it modestly below peers on recent performance. With only one year of XIRR data available, longer-term consistency against category averages of 18.47% (3Y) and 19.6% (5Y) cannot yet be assessed. The declining calendar year returns in 2026 suggest the fund is currently navigating a weak phase for the financial services sector.

This fund is suitable for investors with high risk tolerance who want targeted exposure to India's banking and financial services sector, ideally as a satellite holding within a diversified portfolio rather than a core investment. A time horizon of at least 5-7 years is recommended, as sectoral funds require patience through sector cycles. Investors should be comfortable with periods of underperformance, as evidenced by the -2.25% return in 2026.

• Low maximum drawdown of -0.16% with a Calmar ratio of 0.6549 indicates strong downside control in the recent period
• Diversified portfolio of 38 holdings with no single stock exceeding 4.63% of NAV limits individual stock risk
• Competitive expense ratio of 0.41% for a sectoral fund in the direct plan

• 1Y XIRR of 11.48% underperforms the category average of 12.13%, and 2026 calendar year return is negative at -2.25%
• Heavy sector concentration with over 69% in Banks and Finance exposes investors to financial sector-specific downturns
• Only one year of XIRR data is available, making it difficult to evaluate long-term consistency versus category peers