The infrastructure sector has been down in value, and the stocks and funds in this sector are available at cheap prices. Should one invest in them for the next 10 years?
-Kuldeep
Investments in infrastructure could prove to be extremely dangerous. The way the economic cycle has changed in the past 4-5 years, after the infrastructure stocks and funds came into the picture, the level of optimism in them has gone down. Today, these companies are under heavy debts and their order books are weak. However, in the next few years, infrastructure companies could do well. But at the same time, we don’t think investors should go for infrastructure funds because a diversified equity fund will have exposure to infrastructure companies as and when they do well. Infrastructure funds are sectoral funds with narrow mandates and investors should stay away from them.
This article was originally published on March 16, 2012.
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