SBI ESG Exclusionary Strategy Fund

SBI ESG Exclusionary Strategy Fund has delivered consistent SIP XIRR of 13.49% over 3Y, 14.49% over 5Y, and 14.07% over 10Y, outperforming the NIFTY 50 on a lump-sum CAGR basis across all periods (e.g., 11.42% vs 9.99% over 7Y) with positive alpha at every horizon. However, it trails the sectoral/thematic category average SIP XIRR by roughly 2-3 percentage points across all periods (e.g., 14.49% vs 17.45% over 5Y). The 1Y XIRR of 8.32% reflects a weak recent year, with a -9.94% calendar return in 2026.

The fund shows a defensive risk profile with beta below 1 (0.95) and downside capture consistently around 92-94%, meaning it falls less than the NIFTY 50 in downturns. Upside capture of 94-96% combined with positive alpha indicates it gives up some upside but still beats the benchmark overall. The Calmar ratio of roughly 0.37-0.42 across horizons reflects steady risk-adjusted returns, though 8 drawdown events exceeding 10% show meaningful interim volatility.

The portfolio is diversified across 44 holdings, but Banks dominate at 24.3% of NAV, with ICICI Bank (8.5%), HDFC Bank (7.66%), and Kotak Mahindra Bank (4.32%) as the top three positions. Automobiles (9.0%) and IT-Software (6.5%) are the next largest sectors, giving the fund a large-cap, financially-tilted character. This concentration in banks provides stability but ties performance closely to the financial sector cycle.

Against sectoral/thematic peers, the fund lags on SIP XIRR at every horizon — 13.49% vs 16.22% (3Y) and 14.07% vs 16.44% (10Y) — partly because its ESG exclusionary mandate restricts the opportunity set. Its consistency versus the NIFTY 50 is strong, with positive alpha across 1Y to 15Y periods and lower downside capture in every window. Investors should view it as a core large-cap alternative rather than a high-octane thematic performer.

This fund suits conservative-to-moderate investors seeking ESG-screened exposure with lower downside capture than the index, ideally with a 5-7 year horizon to ride out drawdown cycles. It fits those who prioritize steady benchmark-beating returns over category-topping performance. Investors expecting aggressive thematic-style returns may be disappointed given its consistent lag versus category peers.

• Positive alpha versus NIFTY 50 across all measured periods (e.g., 3.79% over 1Y, 2.36% over 12Y) with beta consistently below 1
• Downside capture of 92-94% across all horizons, offering better downside protection than the benchmark
• Consistent long-term SIP XIRR of around 14% over 5Y, 7Y, and 10Y periods

• Underperforms the sectoral/thematic category average SIP XIRR by 2-3 percentage points at every horizon (e.g., 14.49% vs 17.45% over 5Y)
• Heavy sector concentration in Banks at 24.3% of NAV ties returns closely to financial sector performance
• Relatively high expense ratio of 1.37% and weak recent performance with a -9.94% calendar return in 2026