Exchange-traded funds formed from India’s sold-down stakes in state-owned companies have lagged far behind as the market continues to recover from this year’s pandemic selloff.

The Central Public Sector Enterprises fund, or CPSE ETF, and the Bharat 22 ETF are each down about 28% in 2020 compared with an 8.5% decline in the S&P BSE Sensex. Created to raise funds for public spending while paring the fiscal deficit, these funds have performed poorly due to their high weightings of utilities and energy stocks.

Oil and power stocks rank in the bottom half of India sector performance this year, while healthcare and IT lead gains. The S&P BSE PSU Index, a gauge of state firms, has shed more than 30% in 2020, set for its third straight annual loss. In fact, the gauge has trailed the Sensex in all but two years since the global financial crisis.

“The Bharat 22 ETF basket consists of names which are largely cyclical or value-oriented in nature, and are highly sensitive to macros," said Chintan Haria, head of product development and strategy at ICICI Prudential Asset Management Co., which runs the fund. “At a time when GDP is slowing down, many of the names have lagged in terms of performance."

Performance is likely to improve as growth recovers, Haria said in an email. Nippon Life India Asset Management Ltd., which manages the CPSE ETF, didn’t respond to an emailed request for comment from Bloomberg News.

The government raised more than 613.5 billion rupees ($8.4 billion) through divestment of companies like Coal India Ltd., Oil & Natural Gas Corp Ltd. and NTPC Ltd. into ETFs. But not everyone is convinced of the merits of the funds for investors.

“There is no specific strategy or style that goes into it, save for all of them being state-owned firms," said Vidya Bala, head of research and co-founder at Chennai-based “We think, select public sector undertakings do hold potential and to realize it, it is best done by investing in specific stocks."