MahindraManulife Banking and Financial Services Fund

The fund's 1-year SIP XIRR of 5.34% trails the category average of 12.08% significantly, indicating underperformance among sectoral peers on a like-for-like basis. Calendar year returns have been uneven, with a 7.3% gain in 2025 followed by a -5.53% decline in 2026, reflecting sector cyclicality. The 1Y rolling mean of 8.05% (lump-sum) provides a broader view of return dispersion over time.

The maximum drawdown of just -0.16% with a short 33-day duration is unusually mild, though recovery took 143 days and the fund has recorded 2 drawdown events exceeding 10%, a reminder of its inherent volatility. The 1Y Calmar Ratio of 0.4992 indicates only moderate return generation relative to maximum drawdown risk. Overall, the fund exhibits sector-driven volatility typical of thematic financial services portfolios rather than extreme asset-level risk.

Banks dominate at 54.3% of the portfolio, with Finance at 19.8% and Capital Markets at 12.9%, keeping the fund firmly concentrated in its financial services mandate. The top 10 holdings account for roughly 61.8% of NAV, led by ICICI Bank (11.88%) and HDFC Bank (10.18%), while the remaining 21 holdings provide limited diversification. Exposure across NBFCs (Shriram Finance, Bajaj Finance), exchanges (MCX), and fintech adds some breadth within the sector.

With a 1-year SIP XIRR of 5.34% versus the category average of 12.08%, the fund currently sits well below its sectoral peers, and the weak 2026 return of -5.53% suggests recent positioning or sector headwinds have weighed on performance. There is no evidence in the available data of strong long-term consistency versus peers. Investors should weigh this recent underperformance against the fund's stable, sector-focused mandate.

This fund is suitable for investors with high risk tolerance who already hold a core diversified equity portfolio and want a tactical, sector-specific allocation to banking and financial services. Given sector cyclicality, an investment horizon of at least 5 to 7 years is appropriate to ride through financial sector downcycles. It should be treated as a satellite holding, not a core portfolio option, with position sizing kept modest.

• Low expense ratio of 0.55% for a direct sectoral fund keeps costs competitive
• Core allocation to high-quality large-cap banks (ICICI, HDFC, Axis) comprising the top three holdings
• Concentrated 31-stock portfolio allows focused exposure within the financial services theme

• 1-year SIP XIRR of 5.34% is well below the category average of 12.08%, indicating recent underperformance versus peers
• Heavy concentration in Banks (54.3%) makes returns highly dependent on a single sub-sector cycle, as seen in the -5.53% calendar year 2026 return