HDFC Banking and Financial Services Fund
Direct · GrowthAI Summary
HDFC Banking and Financial Services Fund has delivered strong alpha over the NIFTY 50, with 3Y and 5Y fund CAGRs of 11.52% and 10.42% versus benchmark CAGRs of 5.26% and 4.44% respectively. Its SIP XIRR of 16.19% over 3Y slightly beats the category average of 16.26%, though the 5Y XIRR of 13.25% trails the category's 17.46%. The 1Y XIRR of 11.86% also outpaces the category average of 10.68%, indicating recent relative resilience.
The fund shows a beta of roughly 1.06 across longer horizons, meaning it moves slightly more than the market, but its downside capture of 96.99% (3Y) and 97.83% (5Y) versus upside capture above 105% indicates a favorable asymmetry. The fund has experienced 4 drawdown events exceeding 10%, with the maximum drawdown lasting 233 days and taking 148 days to recover, reflecting the inherent volatility of a sector-focused portfolio. Calmar ratios of 0.78 (3Y) and 0.60 (5Y) suggest moderate risk-adjusted efficiency typical of sectoral funds.
The portfolio is heavily concentrated in banks, which account for 58.3% of assets, with finance adding another 21.8%, making the fund almost entirely dependent on financial sector performance. Top holdings ICICI Bank (13.85%) and HDFC Bank (12.89%) together represent over a quarter of the NAV, and the 36-stock portfolio offers limited diversification within a single sector theme. Exposure spans banks, NBFCs, insurance (9.2%), and capital markets (8.4%), providing some breadth within financial services.
Against category peers, the fund's 3Y SIP XIRR of 16.19% is essentially in line with the 16.26% average, while its 1Y XIRR of 11.86% outperforms the 10.68% category average. However, the 5Y XIRR of 13.25% lags the category average of 17.46% by over 4 percentage points, suggesting weaker long-horizon SIP compounding relative to peers. Calendar year returns show reasonable consistency, with positive returns in 2021 through 2025 before a -4.75% decline in 2026.
This fund is suitable for investors with high risk tolerance who already hold diversified core equity funds and want a tactical, sector-specific allocation to financial services. A time horizon of at least 5 to 7 years is advisable, given the sector's cyclicality and the fund's history of multi-month drawdowns. Investors should cap sectoral exposure to a small portion of their overall portfolio and be prepared for periods of significant underperformance versus diversified funds.
- Consistent alpha over NIFTY 50 across all measured horizons, with 3Y alpha of 6.34% and 5Y alpha of 6.10%
- Favorable capture asymmetry, with upside capture above 105% and downside capture below 98% over 3Y and 5Y periods
- Exposure to high-quality large-cap financial franchises such as ICICI Bank, HDFC Bank, and Kotak Mahindra Bank
- Extreme sector concentration, with banks and finance together comprising over 80% of the portfolio, leaving the fund vulnerable to financial sector downturns
- 5Y SIP XIRR of 13.25% significantly trails the category average of 17.46%, indicating weaker long-term SIP performance versus peers
- Four drawdown events exceeding 10%, with the worst drawdown taking 233 days and requiring 148 days for recovery
Generated on 23-10-2026, 2:58 AM. Verify before investing.
Gives more importance to longer time periods (10Y, 20Y) than shorter ones (1Y, 3Y). This balances out recent outperformance and gives a more realistic picture of what long-term returns might look like.
The largest peak-to-trough decline in the fund's NAV. Shows the worst-case loss an investor would have experienced at any point in the fund's history.
If you invested ₹1,00,000 every month via SIP, here's how this fund has historically performed across different time horizons.
| Duration | Invested | Median Value | XIRR | Min XIRR | Max XIRR |
|---|---|---|---|---|---|
| 1 Year | ₹12.00 L | ₹12.98 L | 15.8% | -25.5% | 41.0% |
| 3 Years | ₹36.00 L | ₹45.76 L | 16.3% | 3.4% | 27.2% |
| 5 Years | ₹60.00 L | ₹84.10 L | 13.3% | 9.8% | 15.5% |
SIP returns vs benchmark & category
Annualised SIP return (XIRR) over each rolling horizon — like-for-like, not lump-sum.
| Duration | Fund SIP XIRR | NIFTY 50 | Category avg | Fund edge |
|---|---|---|---|---|
| 1 Year | 15.8% | 14.3% | 10.6% | +1.5% |
| 3 Years | 16.3% | 11.0% | 16.2% | +5.3% |
| 5 Years | 13.3% | 10.4% | 17.4% | +3.0% |
| Duration | Mean | Median | Min | Max | Sharpe | Sortino | % Positive | Cat. Mean | Cat. Median |
|---|---|---|---|---|---|---|---|---|---|
| 1 Year | 15.6% | 14.9% | -5.6% | 40.3% | 0.94 | 4.07 | 96% | — | — |
| 3 Years | 16.9% | 16.8% | 10.8% | 26.1% | 3.28 | — | 100% | — | — |
| 5 Years | 12.8% | 13.4% | 9.4% | 14.8% | 4.47 | — | 100% | — | — |
Calmar Ratio by Duration
Compared against NIFTY 50
| Duration | Alpha | Beta | Upside Capture | Downside Capture | Fund CAGR | Bench CAGR |
|---|---|---|---|---|---|---|
| 1 Year | +10.58 | 1.16 | 117.7% | 104.6% | -5.2% | -12.7% |
| 3 Years | +5.46 | 1.07 | 105.2% | 98.2% | 10.8% | 5.4% |
| 5 Years | +4.71 | 1.06 | 105.3% | 99.1% | 9.1% | 4.5% |
| 7 Years | +3.41 | 1.06 | 104.5% | 98.8% | 8.7% | 5.3% |
| 10 Years | +2.46 | 1.06 | 104.5% | 98.8% | 6.0% | 3.7% |
| 12 Years | +2.11 | 1.06 | 104.5% | 98.8% | 5.0% | 3.1% |
| 15 Years | +1.74 | 1.06 | 104.5% | 98.8% | 4.0% | 2.5% |
| # | Stock | % of NAV |
|---|---|---|
| 1 | ICICI Bank Ltd. | 13.85% |
| 2 | HDFC Bank Ltd.£ | 12.89% |
| 3 | Kotak Mahindra Bank Limited | 8.61% |
| 4 | Axis Bank Ltd. | 7.76% |
| 5 | State Bank of India | 6.07% |
| 6 | Shriram Finance Ltd. | 4.22% |
| 7 | Bajaj Finance Ltd. | 3.96% |
| 8 | SBI Life Insurance Company Ltd. | 3.72% |
| 9 | Five-Star Business Finance Limited | 2.67% |
| 10 | Au Small Finance Bank Ltd. | 2.40% |