India’s infrastructure budget is booming. Time to invest in infra funds?

Why are infrastructure mutual funds in the spotlight?

India is rapidly ramping up its infrastructure spending. The govt capex has doubled in the last three years, naturally drawing investor attention.

Where do these funds invest?

India’s infra goes beyond just roads and bridges. It includes sectors like transportation, energy, communications etc.

How many infrastructure funds are there?

There are 16 such funds, 2 of which are passively managed. Rest are actively managed, benchmarked against the Nifty Infrastructure TRI and BSE India Infrastructure TRI.

What are the risks involved in these funds?

They don’t always stick to the core infra theme & often invest in allied sectors, which could be misleading. Most infra-related sectors are capital intensive and prone to defaults.

Past performance

We found that these funds have mostly underperformed their broader S&P BSE 500 TRI index in the last 10 years.

What to keep in mind before investing

Many infra-linked sectors are highly volatile given their cyclicity and are often debt-laden. We have expanded on this in detail in our story. Click on the link below