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Infrastructure Investing

Theme-based investing is risky, but here are some funds worth a look

One year ago, I invested in HDFC Infrastructure Fund. On redemption, will I be charged an exit load? Also, I wanted to know more about the HDFC Top 200 Fund and UTI Infrastructure Fund. I have also invested in BNP Sundaram Paribas Select Focus and BNP Sundaram Paribas Select Midcap. Which one is better?

HDFC Infrastructure is a relatively new fund and in the entire universe of infrastructure, no outstanding feature has been highlighted in it. UTI Infrastructure Fund is a very good fund due to the initial lead.

As far as investing in infrastructure sector fund goes, then it should be remembered that a  diversified equity fund is a better option as infrastructure is a very niche definition as a varied variety of investments that fall under these types of funds. In fact, if you were to define infrastructure, then it would constitute 70 per cent of Sensex. The way mutual fund investors invest their money, according to this is that 70 per cent of the weightage, defining infrastructure as banking, telecom, construction and engineering companies.  If we remove healthcare, pharmaceutical and IT, then infrastructure is gets closely defined. But since infrastructure, as a theme, has evolved in the past few years in the mutual fund industry, then a good option is UTI Infrastructure.

Then there is Sundaram Select Focus, which is a relatively aggressive large-cap fund and crucially, its performance is very impressive. Sundaram Midcap is also a similar fund. About all these funds, you should have a clear comprehension that when the midcap funds fall in the markets, then what would be your experience be – bad or acceptable? Select Focus would show more resilience relatively, but all these three funds are good.

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