HSBC Banking and PSU Debt Fund Direct Growth Review 2026: NAV, Returns, Portfolio & Should You Invest?

HSBC Banking and PSU Debt Fund Direct Growth Plan has a NAV of ₹27.272 as of 09 Sep 2026 and manages ₹3,777 Cr. Its 1-year, 3-year and 5-year returns are 5.5%, 7.08% and 5.7% respectively, and the risk category is Medium Risk.

Our view is that this is a conservative debt fund with a fairly steady long-run profile, helped by a portfolio centred on banking and PSU issuers, select corporate debt and some government securities. The recent return pattern is better suited to investors who want moderate stability rather than sharp upside, with the main trade-off being that returns can trail a stronger short-term benchmark stretch.

Quick facts

Particular	Details
NAV	₹27.272 as of 09 Sep 2026
AUM	₹3,777 Cr
Expense Ratio	0.23%
Launch Date	01 Jan 2013
Min SIP	₹1,000
Risk Category	Medium Risk
Benchmark	Nifty 50
Fund Category	Debt
Exit Load	No exit load after holding period
Fund Managers	Mahesh Chhabria, Mohd Asif Rizwi

The fund is managed by Mahesh Chhabria and Mohd Asif Rizwi.

Source data date: as of 09 Sep 2026

Performance

Period	Fund return	Benchmark return
1M	0.03%	-4.69%
3M	1.5%	0.93%
1Y	5.5%	-7.16%
3Y	7.08%	6%
5Y	5.7%	5.87%

The recent profile is better than the benchmark over 1 month, 3 months and 1 year, which tells us the fund has held up more evenly than the reference index in the latest stretch. The 1-year number is especially notable because the benchmark is negative over the same period, while the fund stayed in positive territory.

The longer view is more balanced. Over 3 years, the fund and benchmark are close, and over 5 years the benchmark is only slightly ahead. That suggests the fund has not relied on one-off bursts; instead, it has delivered a steadier path with modest compounding.

The pattern across the time windows shows some short-term waviness, but not the kind of sharp drawdown or rebound that would normally point to aggressive duration risk. For investors, that usually means the fund may be more about carrying income-style return consistency through different rate environments than about outperforming every short period.

Overall, the short-term edge over the benchmark is stronger than the long-term gap. That makes the fund look resilient in recent market conditions, even though the 5-year figure remains broadly in line with the benchmark rather than clearly ahead of it.

Source data date: as of 09 Sep 2026

Should you BUY or HOLD HSBC Banking and PSU Debt?

A fund's past returns alone don't tell you whether you should buy it today or continue holding it.

The right decision depends on factors such as your current allocation, purchase price, risk profile, investment horizon and the role this fund plays in your overall portfolio.

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Peer comparison

Fund	1Y return	3Y return	5Y return
HSBC Banking and PSU Debt Fund Direct Growth Plan	5.5%	7.08%	5.7%
TRUSTMF Banking & PSU Fund Direct Growth Plan	7.26%	7.52%	6.17%
Franklin India Banking & PSU Debt Fund Direct Growth Plan	6.68%	7.58%	6.45%
UTI Banking & PSU Debt Fund Direct Growth Plan	6.3%	7.47%	7.72%
Bandhan Banking and PSU Debt Fund Direct Growth Plan	6.05%	7.22%	6.26%
ICICI Pru Banking and PSU Debt Fund Direct Growth Plan	6.01%	7.39%	6.71%

This assessment is prepared by Uniapps Investment Adviser Pvt. Ltd. under SEBI Registered Investment Adviser registration INA000017639.

On the latest 1-year view, the fund trails all five peers listed here, although its 5.5% return remains positive. The gap is narrower over 3 years, where it sits close to the middle of the peer group, but the 5-year return is still below several peers that have compounded more strongly.

That mix tells a split story: the short-term showing is softer than the stronger peer names, while the medium-term outcome is more competitive. The longer record suggests the fund has delivered a reasonable, but not standout, compounding path compared with these peers, especially when measured over five years.

Source data date: as of 09 Sep 2026

Portfolio: where your money goes

Holding	Sector	Weight
Sidbi**	Corporate Debt	8.99%
Indian Railway Finance Corporation Ltd**	Corporate Debt	8.89%
Exim Bank**	Corporate Debt	8.26%
NABARD**	Corporate Debt	5.66%
REC Limited**	Corporate Debt	5%
Housing and Urban Development Corp. Ltd.**	Corporate Debt	4.63%
Power Finance Corporation Limited**	Corporate Debt	4.51%
Canara Bank**	Certificate of Deposit	4.49%
National Housing Bank**	Corporate Debt	3.43%
6.94% GOI 11-May-2036	Government Securities	3.11%

The top 10 holdings account for approximately 56.97% of the portfolio.

To see all holdings, visit the HSBC Banking and PSU Debt Fund Direct Growth Plan page

The largest holding, Sidbi**, is 8.99%, which is meaningful but not unusually dominant for a debt portfolio built around high-quality issuers. The decline from the first holding to the tenth is fairly measured, moving from the high single digits to just above 3%, so the exposure does not look narrowly concentrated in one line item.

At the same time, the top 10 positions still account for 56.97% of the portfolio, which means a little more than half of the disclosed holdings sit in the largest names. With 38 holdings disclosed, the fund likely has a longer tail beyond the visible top positions, so the overall structure may provide some spread while still leaving the biggest issuers with the most influence.

That mix is consistent with a banking and PSU debt strategy. The largest weights sit largely in corporate debt names, with one certificate of deposit and one government security in the top 10, so the portfolio may be designed to balance issuer quality, liquidity and income stability rather than chase concentration in a single security type.

Source data date: as of 09 Sep 2026

Who should invest

This fund may suit conservative investors who can accept some variation in returns but still want a debt-oriented allocation with relatively steady behaviour across market cycles. The Medium Risk tag and the return pattern suggest it is better aligned with investors who value stability and moderate compounding over aggressive upside.

A medium- to long-term horizon fits it better than a very short holding period, because the 3-year and 5-year outcomes are more useful than the monthly swings. The main trade-off is that the fund can stay competitive without always leading stronger peers, especially when the recent environment turns favourable for alternative debt strategies.

Tax and exit load

Holding period	Tax rate	Description
Units held less than 1 year	20%	Short-term capital gains tax
Units held more than 1 year	12.5%	Long-term capital gains tax

Exit load: No exit load after holding period.

Source data date: as of 09 Sep 2026

Frequently asked questions

What is the current NAV of HSBC Banking and PSU Debt Fund Direct Growth Plan?
The current NAV is ₹27.272 as of 09 Sep 2026.

What are the fund’s 1-year, 3-year and 5-year returns?
Its 1-year, 3-year and 5-year returns are 5.5%, 7.08% and 5.7%.

How does it compare with the benchmark?
It has beaten the benchmark over 1 month, 3 months and 1 year, while the 3-year and 5-year numbers are close to the benchmark.

How does it compare with peer funds?
Its 1-year return is below the five peer funds listed here, while the 3-year result is broadly in the same range and the 5-year result is weaker than several peers.

Is there a minimum SIP amount?
Yes. The minimum SIP amount is ₹1,000.

Who manages the fund and what is the exit load?
The fund is managed by Mahesh Chhabria and Mohd Asif Rizwi. There is no exit load after the holding period.

Bottom line

HSBC Banking and PSU Debt Fund Direct Growth Plan looks steadier over time than its recent benchmark comparison alone might suggest. The latest stretch is better than the benchmark, but the longer record is more balanced, which makes the fund feel like a consistent debt allocation rather than a clear outperformance story. The portfolio is led by banking and PSU-style credit exposure with a meaningful share in the largest holdings, so it may appeal to conservative investors who want medium-risk debt exposure and can accept that short-term peer comparisons are not always the strongest.

Published on 10 September 2026 at 12:20 PM IST

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RIA disclosure

Mutual fund investments are subject to market risks. Read all scheme-related documents carefully before investing. This review is prepared by Uniapps Investment Adviser Pvt. Ltd. (earlier known as Uniapps Global Research Pvt. Ltd.) under SEBI Registered Investment Adviser registration INA000017639 for general informational purposes and is not personalized investment advice.