The ownership of PSUs in mutual funds has reached a 3-year high as mutual fund managers chase the momentum in Indian PSU stocks. The sharp outperformance and re-rating potential, along with sector-specific triggers and the 'Modi ki guarantee' factor, have fueled interest in PSU stocks. Nifty CPSE has more than doubled in last one year. PSU banks are outperforming private sector banks due to low valuations which many consider to be fair even after the run-up in stock prices.