PSU Funds: Govt spending could aid recovery, suited for high-risk takers

Allocate 5-10% in satellite portfolio with five-year horizon

Public sector undertaking (PSU) funds, a top-performing theme in 2024 calendar year (CY24), have witnessed a sharp reversal. In the past year, they have lost an average of 11.3 per cent, the steepest drop among equity fund categories. This includes a 4.7 per cent fall in the past month.

 

“After a stupendous performance in 2024 (up 22.9 per cent), these funds experienced heavy inflows, as investors chased recent high returns. Following strong rallies, many investors booked profits, contributing to downward pressure on PSU stock prices. Also, recent quarters have seen an earnings shortfall that has led to disappointment,” says Devender