Banking and Financial Services sector in India is one of the most promising sectors, and now with the inclusion of technology in it, this sector and the fintech industry have been touching new heights every day. There has been growth in the deposits, while the non-performing assets have reduced significantly over the years in the banking industry. While in the financial services industry, with the rise in financial literacy in India, people are now more aware of investments and other financial products, which has increased the demand for the same. 

In this article, we will explain about the LIC MF Banking & Financial Services fund Direct – Growth, which has been built to use the banking and financial services stocks. The article will revolve around the intricate details of the fund, including its performance, risk factors, and lot more.  

LIC MF Banking & Financial Services Fund Direct-Growth Fund Management and Objectives

LIC MF Banking & Financial Services Fund is a mutual fund that invests in the equity and equity related instruments of companies which are engaged in the banking services or financial services. This scheme’s main objective is to accumulate wealth over time using capital appreciation method. This is a sectoral fund which means it particular invests in the stocks of companies belonging to the banking and financial services sector. 

LIC MF Banking & Financial Services Fund Direct Plan-Growth is managed by – 

• Jaiprakash Toshniwal: He has been managing the fund since 6 September 2021. He is a CFA from CFA Institute, USA, MS finance, and a B.com Graduate. Before being associated with LIC Mutual Fund, he was working with the India First Life Insurance Taurus Mutual Fund. Apart from this fund, he manages three other funds in the AMC as well. 

Excited about investing in the LIC MF Banking & Financial Services Fund? Open a free Demat account today!

How Does the LIC MF Banking & Financial Services Fund Work?

For the LIC MF Banking & Financial Services Fund Direct, like any other sectoral fund, the fund manager picks the top companies from the banking and financial sector. He includes stocks across market capitalization however mostly focuses on the blue chips, and giant companies. That said, a significant ratio of the AUM is invested into midcap and small cap as well. 

The fund generates return from the growth of the underlying stocks, and their performance. If the underlying stocks perform well, the returns increases and vice versa. 

Performance and Returns (As of 11 April 2025) 

LIC MF Banking & Financial Services Fund Direct-Growth has been offering the following returns – 

Time Frame	LIC MF Banking & Financial Services Fund Direct-Growth (%)	Category Average
Since Inception	7.45	–
6 Month	-4.15	-1.69
3 Month	2	3.77
1 Month	5.62	6.10
1 Day	1.75	1.63
YTD	-2.03	-0.09
1 Year	0.46	7.35
3 Year	10.70	14.60
5 Year	18.76	23.26
7 Year	8.89	12.57
10 Year	7.35	12.48

If you look at the above table, then the fund has performed well during 3-5 years span however, in the long run that is 7-10 years, the performance had dropped. Another fact is that the fund has been consistent in offering lower than category average returns which suggest that the fund’s performance can be better. 

Investment Allocation (As of 31 Mar 2025)

The LIC MF Banking & Financial Services Fund Growth has 94.52% of its assets invested in equity and equity-related instruments, and 5.48% in cash and cash equivalents. 

Market cap-wise asset allocation 

• Giant cap – 54.65%
• Large Cap – 11.73%
• Mid-cap – 21.31%
• Small-cap – 12.31%

As of 31 March 2025, the fund had an average market cap of ₹163852 crore, and it spans

across 30 stocks, where the top 10 stocks make up 67.13% of its assets. 

Sectoral Allocation 

The fund being a sectoral fund predominantly in the banking and financial services sector, and apart from that, it has 1.51% allocation in the consumer discretionary sector, and 0.84% in the industrial sector as on 31 March 2025. 

Stock-wise Allocation 

The top five stocks of the LIC MF Banking & Financial Services Fund include – 

Stocks	Assets (%)
HDFC Bank	20.55
ICICI Bank	12.85
Axis Bank	6.68
SBI	5.91
Kotak Bank	5.67

Key Metrics 

As of 31 March 2025, the fund had an expense ratio of 1.05%, which is a bit higher than the category average of 0.88%.

Fund Details	Information
AUM (Assets Under Management)	₹254 Crore as of 31 March 2025
Category	Equity Fund, open-ended
Fund Manager	Jaiprakash Toshniwal
Exit Load	1% for Redemption of units over 12% of the investment within 90 days
Entry Load	Nil
Minimum Investment	₹5000 (Lump sum)₹200 (SIP)
Benchmark	NIFTY Financial Services TRI

The LIC MF Banking & Financial Services Fund NAV as of 11 April 2025 stood at ₹21.0089. 

Risk and Performance of the LIC MF Banking & Financial Services Fund 

This fund is classified as a ‘Very High Risk’ fund, which indicates that the fund has the potential for higher returns, but there will be high volatility as well. Here are the risk ratios you need to consider for this fund – 

1. Standard Deviation (Std Dev% %): It shows how much the returns vary from the average returns generated by the funds themselves. The higher this number, the more it fluctuates.

The Standard deviation of the fund is around 15.38% higher than the category average of 14.58%, depicting a bit more fluctuation. 

2. Beta: This ratio indicates the volatility of the fund’s performance, compared to similar funds in the market. The lower the Beta, the more predictable the returns are, and vice versa. It helps in comparing funds. 

The LIC MF Banking & Financial Services fund has a beta of 0.98% while the category average is 0.92%, indicating higher volatility. 

3. Sharpe Ratio: This ratio indicates the return you get for the risk you’re taking. A higher number means better risk-adjusted returns.

Currently, this fund has a Sharpe ratio of 0.43% while that of the category is 0.70%, which indicates that the fund has been offering a lower risk-adjusted return. 

4. Sortino Ratio: It is similar to Sharpe but only looks at downside risk (the risk of losing money).

This fund offers a bit higher downside risk compared to its peers. The average for the category stands at 1.61%, while this fund has 1.21%, indicating lower downside risk-adjusted profits.  

5. Alpha: It measures the extra return the fund gives above the market’s average return.

The fund’s return are significantly lower than its peers which is depicted by the negative alpha of -0.88% while the category average stands at 3.15%.

 Taxation for LIC MF Banking & Financial Services Fund 

If you’re investing in the LIC MF Banking & Financial Services Fund, here’s how your returns will be taxed:

1. Short-Term Gains – If you sell the fund units within 1 year of the date of investment, a 20% tax will be levied on the entire return generated during the period. 
2. Long-Term Gains – If you sell the fund units after one year, any profit generated over and above ₹ 1.25 lakh will be taxable at a 12.5% rate. The same rate will be applicable for any investment tenure above 1 year. 

So, the longer you hold your investments, the better returns you can expect and the less effect of taxes!

3. Taxes on Dividends – Dividends earned, if any, will be taxable in the hands of investors as per their tax slabs. If the dividend income surpasses Rs. 10000 in a financial year, then the fund house will deduct 10% TDS before disbursing the dividend into the account of the investor. 

Minimum Investment and Lock-in Period

The minimum investment amount in the LIC MF Banking & Financial Services Fund is ₹5000 for lump sum and SIP, which is ₹200. There is no lock-in period for the LIC MF Banking & Financial Services Fund Direct-Growth.

How to Invest in LIC MF Banking & Financial Services Fund Direct?

You can invest in the LIC MF Banking & Financial Services Fund – Direct Growth plan with Shoonya. 

Shoonya offers a free Demat account,  Zero brokerage trading, advanced trading tools, 100+ technical indicators, and much more!

Investing in Lump Sum Mutual Funds through the Shoonya Web Platform

Here’s a quick guide on how to invest in lump sum mutual funds through the Shoonya web platform:

1. First, you must log in to your Shoonya account at trade.shoonya.com. From the “Orders” section, click on “MF order.”
2. Search for the fund you wish to invest in; in this case, the LIC MF Banking & Financial Services Fund – Direct Growth plan.
3. Choose “Fresh” for a new investment and enter the amount you want to invest.
4. You can complete your purchase by clicking the “Purchase” button.
5. You will receive a payment link on your registered email. Use the link to make the payment.

After payment, your mutual fund units will be allotted to your Demat account within T+2 days.

Note: You can only make the payment using the bank account registered with your Demat account.

Setting Up an SIP for Mutual Funds

If you prefer a Systematic Investment Plan (SIP) for LIC MF Banking & Financial Services Fund Direct Plan-Growth plan, you must follow these steps:

1. First, you need to log in to your Shoonya account at trade.shoonya.com. Go to “Orders” and click on “XSIP.”
2. Find the mutual fund for which you want to set up an SIP. In this case, the LIC MF Banking & Financial Services Fund – Direct Growth plan.
3. If this is your first SIP with Shoonya, you need to create a Mandate ID. 

For that, you must enter the mandate amount and the validity date (until you want to keep your SIP active).

4. You must submit the details, and you’ll receive a Mandate authentication link via email. Approval generally takes 24 hours.

Once your Mandate is approved, you can follow these steps to set up your SIP:

1. Go to “XSIP,” enter the SIP amount, and select “Fresh” as the transaction type.
2. Choose the date when the SIP will be debited directly from your registered bank.
3. The approved Mandate ID will auto-reflect.
4. Choose “Monthly” for monthly debits and specify the number of installments (e.g., 24 installments for a 2-year SIP).

If you do not want to forget your SIPs and invest systematically, the SIP method can be most suitable for you. 

Why Invest in the LIC MF Banking & Financial Services Fund?

The reasons for investing in the LIC MF Banking & Financial Services Fund Direct-Growth can be the fund’s – 

• Better returns within a three to five-year span
• The banking and financial sector is the most promising

Suitability of this Fund| Who Should Invest?

The LIC MF Banking & Financial Services Fund Direct is suitable for investors who:

• Are looking for higher returns and ready to take higher risk 
• Looking for long-term capital appreciation 
• Can stay invested for at least five years 
• Can tolerate market ups and downs and business cycles 

Conclusion

LIC MF Banking & Financial Services Fund has been exploring the most dynamic sector that is banking and financial services, while the sector is quite promising and the prospects of the fund looks impressive but currently if you are investing in this fund, you also need to consider that the fund has higher risk, and lower than category average return. 

LIC MF Banking & Financial Services Fund Direct Plan-Growth| FAQs

Source: ValueResearch

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Disclaimer: Investments in the securities market are subject to market risks; read all the related documents carefully before investing.