Led by the hopes of interest rate cut and revival in economic growth, banking funds outperformed defensive sectors in 2012 with 47.1 per cent average returns, as per a media report.
The Banking index of Bombay Stock Exchange (BSE) also gave returns of around 57 per cent in 2012 compared to negative returns in the previous year, as stocks rallied on the hopes of rate cut by RBI and economic slide coming to an end.
ICICI Prudential Banking and Financial Services emerged as the best performing scheme among such funds dedicated to banking stocks, generating return of over 63 per cent in one year.
Moreover, all the 11 funds dedicated to banking managed to outperform the benchmark index of BSE, the Sensex which rose nearly 25 per cent in the year.
Shares of banks have rallied even faster since the government announced big-bang reforms in September and RBI indicated rate cut in January 2013.