Strong rebound in BFSI funds makes a good case for taking an exposure

Since these funds can be volatile, limit your exposure to 5 per cent

Banking and financial services funds have rebounded strongly with a category average return of 13.5 per cent (for direct, active funds) over the past three months. They have surpassed the Nifty total return index (TRI) which is up 8.8 per cent over the same period. However, their one-year return average return is anaemic (1.7 per cent) due to their underperformance in late 2021 and early 2022. Given their recent performance, however, investors may take a fresh look at these funds.

Diversified exposure

Banking and financial sector funds give exposure to a wide range of sub-sectors: banking, housing finance, insurance, asset