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Best Bank and PSU Mutual Funds to Invest in 2023 | Jobs Vox

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If you are looking for relatively safe debt funds to invest in 2023, you should look at bank and PSU debt funds. These schemes are mandated to invest at least 80% of the unit in debt investments of banks, public sector undertakings and government financial institutions.

Mutual fund advisors say bank and PSU debt schemes are ‘relatively’ safe because they invest only in banks and PSUs. Most of these entities are government-backed or government-owned, so there is no credit risk. As you know, the debt market was soon rocked by the recession and crash. Many conservative investors stopped investing in debt schemes because they were afraid of getting their money back.

However, this does not mean that these plans are risk free. For example, these schemes invest in securities issued by private banks. They have some concerns because they don’t have government support. However, because banks are highly regulated, the risk is low. Also, changes in interest rates may adversely affect these plans.



As mentioned earlier, rising interest rates are bad for debt funds. However, these schemes are comparatively better as they do not invest in long term papers. However, be prepared for some flexibility.

If you are investing for three years and are aware of the risks associated with these schemes, you can consider investing in banking and PSU schemes. Look for monthly updates to keep track of your plans.

Best Bank and PSU Funds to Invest in 2023:

  • IDFC Banking and PSU Debt Fund
  • Axis Banking & PSU Debt Fund
  • Aditya Birla Sun Life Banking & PSU Debt Fund
  • DSP Banking and PSU Debt Fund
  • Kotak Banking and PSU Debt Fund

Method:

ETMuualFunds has developed the following metrics for listing debt mutual fund schemes.

1.
Average returnsHe had rolled every day for the past three years.

2.
Consistency Over the past three years: Hurst Exponent, H is used to calculate the consistency of a fund. The H exponent is a measure of the randomness of the fund’s NAV series. Funds with high H show lower volatility compared to funds with low H.

i) H = 0.5, the regression is said to be a geometric Brownian time series. These types of time series are difficult to predict.

ii) HC

iii) When H > 0.5, it is called continuous persistence. The larger the value of H, the stronger the trend of the series.

3.
Low riskFor this measure, we have considered only negative responses to mutual fund schemes.

X = returns below zero

Y = sum of all squares of X

It is taken to calculate the ratio Z = Y/number of days

Low risk = square root of Z

4.
ExcellenceCash return – Benchmark return. A daily rollup is used to calculate the fund’s return and benchmark and then the fund’s active return.

Asset size: For debt funds, the initial asset size is Rs 50

(Disclaimer: Past performance is no guarantee of future performance.)

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