India’s largest banks by market capitalisation have delivered sharply different returns over the past year. While HDFC Bank has declined 26%, SBI has gained 26%, highlighting the divergence within the banking space.
But for mutual fund investors, another question matters: which actively managed mutual funds have the highest allocation to these banking giants?
Excluding index funds and ETFs, the data shows that several banking and financial-services sector funds have sizeable exposure to the country’s largest lenders.
How have the top 5 banks performed in the last one year?
| Bank | Market capitalisation | 1-year stock return |
| HDFC Bank | ₹10,89,010 crore | -26% |
| ICICI Bank | ₹10,25,265 crore | 2% |
| SBI | ₹9,44,800 crore | 26% |
| Kotak Mahindra Bank | ₹4,17,811 crore | 7% |
| Axis Bank | ₹3,94,102 crore | 20% |
*Source: Screener, Data as on 3 September 2026
The performance gap is significant. SBI delivered the highest one-year return at 26%, followed by Axis Bank at 20%. Kotak Mahindra Bank gained 7%, while ICICI Bank was broadly flat with a 2% return. HDFC Bank was the clear laggard, falling 26%.
For investors, this shows why simply investing in the banking sector does not guarantee similar returns across individual stocks. Fund performance can also differ depending on which banks a portfolio manager owns and how much they allocate to each.
Which mutual funds have the highest stake in HDFC Bank?
| Mutual fund | HDFC Bank allocation |
| UTI Banking and Financial Services | 17.28% |
| SBI Banking & Financial Services | 16.97% |
| Mirae Asset Banking and Financial Services | 14.51% |
| Taurus Banking & Financial Services | 13.21% |
| Nippon India Banking & Financial Services | 13.16% |
*Source: Value Research, Data as on 31 July 2026, % of net assets
UTI Banking and Financial Services has the highest exposure to HDFC Bank at 17.28%, followed closely by SBI Banking & Financial Services at 16.97%.
This is important for investors because HDFC Bank’s sharp one-year decline could have had a relatively larger impact on funds with such high allocations.
Which mutual funds have the highest stake in ICICI Bank?
| Mutual fund | ICICI Bank allocation |
| Taurus Banking & Financial Services | 17.22% |
| Bandhan Financial Services | 14.63% |
| HDFC Banking & Financial Services | 14.37% |
| ABSL Banking & Financial Services | 14.31% |
| Mirae Asset Banking and Financial Services | 14.10% |
*Source: Value Research, Data as on 31 July 2026, % of net assets
Taurus Banking & Financial Services has the highest ICICI Bank allocation at 17.22%.
Since ICICI Bank gained only 2% over the period, the stock’s contribution to these funds would have been relatively modest compared with funds that had higher exposure to SBI or Axis Bank.
Which mutual funds have the highest stake in SBI?
| Mutual fund | SBI allocation |
| Kotak Rural Opportunities | 9.29% |
| Kotak Services | 9.29% |
| Tata Banking & Financial Services | 9.15% |
| UTI Banking and Financial Services | 8.91% |
| Mirae Asset Banking and Financial Services | 8.79% |
*Source: Value Research, Data as on 31 July 2026, % of net assets
SBI stands out among the five banks with a 26% one-year gain. Funds with sizeable SBI exposure had a potential positive contributor to returns.
Interestingly, the highest allocations are around 9%, considerably lower than the top allocations seen for HDFC Bank and ICICI Bank.
Which mutual funds have the highest stake in Kotak Mahindra Bank?
| Mutual fund | Kotak Mahindra Bank allocation |
| SBI Banking & Financial Services | 9.68% |
| UTI Banking and Financial Services | 8.81% |
| ICICI Prudential Banking & Financial Services | 8.79% |
| HDFC Banking & Financial Services | 7.70% |
| Taurus Banking & Financial Services | 7.29% |
*Source: Value Research, Data as on 31 July 2026, % of net assets
Kotak Mahindra Bank gained 7% over the past year. SBI Banking & Financial Services has the highest exposure at 9.68%, while UTI Banking and Financial Services has 8.81%.
Which mutual funds have the highest stake in Axis Bank?
| Mutual fund | Axis Bank allocation |
| UTI Banking and Financial Services | 9.69% |
| Sundaram Financial Services Opportunities | 9.41% |
| LIC MF Banking & Financial Services | 8.90% |
| Invesco India Equity Savings | 8.76% |
| Nippon India Banking & Financial Services | 8.55% |
*Source: Value Research, Data as on 31 July 2026, % of net assets
Axis Bank gained 20% over the past year, making it the second-best performer among these five banks. UTI Banking and Financial Services again appears among the funds with the highest exposure, with a 9.69% allocation.
What should investors take away?
For retail investors, the key takeaway is simple. When comparing similar category funds, look beyond the fund name and check the actual portfolio.
Two funds in the same category can take very different bets on the same banking stocks, and that can materially affect their risk and returns.
Disclaimer: This is purely for educational/informational purposes and should not be taken as any sort of investment advice. Always consult a SEBI-registered advisor before making any investment decisions.
