Energy mutual funds provide exposure to companies across the energy value chain, including oil & gas, power utilities, energy infrastructure, and clean energy.
So, let’s understand the meaning of energy mutual funds, factors to consider, the top 5 funds, and the pros and cons of investing in them.
What are energy mutual funds?
Energy funds are thematic equity schemes that invest primarily in companies in the energy sector. These funds invest in oil & gas exploration, refining, power generation and distribution, coal mining, renewable energy, energy equipment, financing, and supporting businesses such as steel and cement.
As per SEBI regulations, thematic funds must invest at least 80% of their assets in the theme they follow. In this case, the theme is energy and related sectors.
| Fund Name | AUM (in ₹ Cr) | Sector-wise allocation |
Top 3 Holdings |
| SBI Energy Opportunities Fund | ₹8,906 | Energy & Utilities (62.66%), Industrials (20.82%), and Financials (4.51%) | Gujarat Gas, Reliance Industries, and ONGC |
| ICICI Prudential Energy Opportunities Fund | ₹8,581 | Energy & Utilities (53.23%), Industrials (26.77%), and Materials (8.10%) | Reliance Industries, NTPC and ONGC |
| DSP Natural Resources and New Energy Fund | ₹2,457 | Energy & Utilities (41.2%) and Materials (34.7%) | BlackRock Global Funds – World Energy Fund I2, Jindal Steel, and Tata Steel |
| Tata Resources & Energy Fund | ₹1,381 | Materials (52.67%), Energy & Utilities (36.04%), and Industrials (4.31%) | Ultratech Cement, Ambuja Cements, and Tata Steel |
| Baroda BNP Paribas Energy Opportunities Fund | ₹700 | Energy & Utilities (55.4%), Industrials (24.65%), and Materials (13.32%) | Coal India, Reliance Industries, and NTPC |
*Data as on May 31, 2026, Direct Plans, Source: Value Research
Although all five schemes are classified as energy-thematic funds, their portfolios vary considerably.
SBI Energy Opportunities Fund and ICICI Prudential Energy Opportunities Fund are primarily concentrated in energy and utility companies, with holdings such as Reliance Industries, ONGC, NTPC, and Gujarat Gas.
DSP Natural Resources and New Energy Fund takes a broader approach by combining energy exposure with materials stocks and international investments through the BlackRock World Energy Fund.
Tata Resources & Energy Fund is more tilted towards materials, with major holdings in cement and steel companies. At the same time, the Baroda BNP Paribas Energy Opportunities Fund remains focused on conventional energy and utility businesses.
As a result, despite belonging to the same category, these funds offer different levels of exposure to energy, materials, and utilities businesses.
Risks in energy funds
- Dependence on a single sector: Unlike diversified equity funds, energy funds are closely tied to the performance of one sector.
- Cyclical nature: The energy sector goes through periods of growth and slowdown, while fluctuations in oil, gas, coal, and other commodity prices can affect the underlying stock’s performance.
- Policy and regulatory challenges: Changes in regulations, environmental norms, subsidies, tariffs, or pricing policies can impact the prospects of energy-related businesses.
Disclaimer: This is purely for educational/ informational purposes and should not be taken as any investment advice. Always consult a SEBI-registered advisor before making any investment decisions.
