Over the last couple of years there has been no dearth of thematic funds. Funds to cash in each and every sector and theme were conceived and put into the market. So if there were opportunities and contra funds, there was also dividend yield, MNC funds, multi-caps fund etc fighting for shelf space. While some of them have lagged, and some have been the also-rans, the one that has really build base for themselves are infrastructure funds.
Riding on the construction boom and the tremendous growth of companies engaged in the production of capital goods, the infrastructure funds have delivered trail-blazing returns over the last one year.
Currently there are seven funds pegged upon the infrastructure theme, of which three are more than a year old. And on the basis of one-year returns, all the three of them rank at the top of the category of diversified equity funds. The best performer, Prudential ICICI Infrastructure, has delivered 75 per cent, miles ahead of an average peer's 46 per cent return.
Over a shorter three-month horizon, five of these seven have landed in the top quartile of the category, while the remaining two are not far behind in the second quartile. However, despite putting up a strong performance, the assets of these have declined over the last six months. The only fund that has benefited is UTI Infrastructure. From Rs 223 crore in October last year, its asset size has increased to Rs 534 crore by the end of October this year.
As far as the portfolios are concerned, all except Prudential ICICI Infrastructure are large-cap oriented. As per the portfolio of October 2006, these seven funds taken together have invested in 142 stocks. Of these, as many as 80 stocks are held by only one of these funds, while 13 are present in the portfolio of five or more. But stocks out of these 13 account for a significant 35-40 per cent of the assets of these funds, which suggests there is a fair amount of similarity in the top holdings. The infrastructure-related sectors like construction, basic/engineering, diversified and energy largely dominate the portfolios of these funds, but they also invest in the diverse sectors like chemicals, automobiles and financial services. Some of them even have investments in consumer non-durables like Bajaj Hindusthan and Orient Paper.
Some of the common holdings which have led these funds to top performance include Bharat Heavy Electricals Ltd (BHEL), Crompton Greaves, Grasim Industries and Siemens. All of them have grown in leaps and bounds over the past year. While Siemens zoomed up 158 per cent, Grasim Industries (146 per cent), BHEL (113 per cent) and Crompton Greaves (94 per cent) have also grown rapidly.
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