Top 3 Infrastructure Funds for 2019
The infrastructure mutual fund category has given an average return of -22.71% in the last year where the number is even less than small and mid-cap funds. This makes it the top laggard in the race. However, mutual fund managers are optimistic about the prospects of this sector. In terms of raw data, they believe a lot of activities are happening in the segment which will help it grow. Infrastructure is a high-beta sector. Throughout the years, when the market performed badly, infra sector funds delivered negative returns, and vice- versa.
Going with this view, we hope these top 3 infrastructure funds can bring happy news for investors who are willing to invest for the long term. So, let’s see the recommendations and find out why MySIPonline experts hold strong hope from this segment.
Table Of Content
Why Invest in Infrastructure Sector Funds?
Investment in Infrastructure segment can offer a great advantage to the Indian investors. The four basic aspects that support the development of the segment are Robust Demand, Attractive Opportunities, Policy Support, and Increasing Investments.
- 100% Paperless
- No Transaction Charges
- Easy to Invest
- Safe & Secure
There are several other reasons which are in favor of the investors who hold strong bet for this segment, which are:
- For a sustainable development of the country, India is looking forward to investing worth Rs 50 trillion in infrastructure by 2022.
- Favorable valuations will make this sector an attractive opportunity.
- Government initiatives like ‘Housing For All’ and ‘Smart City Mission’ will direct the growth in this segment.
- This sector is one of the largest receivers of the FDI inflows in India.
- The Government’s keen interest in infra development of the country has built caught the eye of many investors in this fund.
What Mutual Fund Experts Expect from This Segment?
Mutual fund experts, as well as advisors, suggest the existing investors of the infrastructure segment to hold on to their investments. New investors can too get in with a longer investment horizon in mind.
The infrastructure sector is a demanding space where the returns are always going to be nonlinear and lumpy, for it being a cyclical sector. For better profits, it will require a fairly much higher investment tenure than a normal diversified mutual fund scheme. For the existing investors, if the investment objective is long term and they hold a strong bet in this segment, then they can prefer staying with mentioned top 3 infrastructure funds.
On a three to five year basis, we have seen trends moving in the right direction on the infra spend from the government side. These top 3 infrastructure funds should augur well if one has a long investment horizon to invest in this space.
Top 3 Infrastructure Funds 2019
L&T Infrastructure Fund (G)
The scheme by L&T Mutual Fund is specifically focused on the infrastructure theme. With the allocation of Rs 5.97 trillion in the Union Budget of 2018, the companies of this particular theme are set to achieve new laurels in the near future. In the past, this fund has shown significant returns for long-term investors. It has delivered 20% trailing return in 5 years and 13.10% in 10 years as on February 15, 2019. In the last 1 year, it has faced several ups and downs and has shown a reason why it is considered risky due to the bear market.L&T Infrastructure Fund is in safe hands of Mr. Soumendra Nath Lahiri who is following a diversified approach with investment in 47 stocks all from infrastructure and related sectors including energy, engineering, metals, communication, etc.
| Basic Information- L&T Infrastructure Fund (G) | |
|---|---|
| Category | Equity: Sectoral-Infrastructure |
| Benchmark | S&P BSE India Infrastructure TRI |
| Launch Date | 27-Sep-07 |
| Asset Size | Rs. 1,798 crore (As on Jan 31, 2019) |
| Expense Ratio | 2.20% (As on Jan 31, 2019) |
| Minimum SIP Investment | Rs. 500 |
| Minimum Lumpsum Investment | Rs. 5000 |
| Return Since Inception | 3.13% |
| Exit Load | 1% for redemption within 365 days |
Franklin Build India Fund (G)
Being a 5 star-rated scheme, this scheme from Franklin Templeton Mutual Fund stepped in the mutual fund world on September 04, 2009. The returns since launch that Franklin Build India Fund has maintained are 14.84%. Considering its historical returns, in the past one, three, five, and seven years tenure, it was successful in beating its category average with a good margin throughout with -11.25, 15.10, 21.91, and 18.29 percent returns, resp., as on Feb 14, 2019. In the past one year, when the category went negative up to -22.71 percent, it managed to cap the losses with a great margin delivering -11.25% returns for the investors, showing strong signs of good fund management and investment strategy.
| Basic Information- Franklin Build India Fund (G) | |
|---|---|
| Category | Equity: Sectoral-Infrastructure |
| Benchmark | S&P BSE India Infrastructure TRI |
| Launch Date | 4-Sep-09 |
| Asset Size | Rs. 1,136 crore (As on Jan 31, 2019) |
| Expense Ratio | 2.26% (As on Dec 31, 2018) |
| Minimum SIP Investment | Rs. 500 |
| Minimum Lumpsum Investment | Rs. 5000 |
| Return Since Inception | 14.84% |
| Exit Load | 1% for redemption within 365 days |
Invesco India Infrastructure Fund (G)
A moderately low risky fund of the Infrastructure segment, Invesco India Infrastructure Fund is a four-star rated scheme of Invesco Mutual Fund. It was launched on Nov 21, 2007, and is currently managed by Mr. Neelesh Dhamnaskar and Mr. Pranav Gokhale. It is a good scheme for a long-term investor who has a high-risk appetite. Considering its past performance, it has delivered 16.57%, 10.79%, and 12% returns in 5, 7, and 10 years tenure, resp., which are always greater than that of its category’s average in the same duration as on Feb 14, 2019. Talking about its portfolio allocation, , Invesco India Infrastructure Fund is currently investing its assets in 28 stocks, where the top five holdings are Larsen & Toubro, Power Grid Corporation, Container Corp., Schaeffler India, and Reliance Industries.
| Basic Information- Invesco India Infrastructure Fund (G) | |
|---|---|
| Category | Equity: Sectoral-Infrastructure |
| Benchmark | S&P BSE India Infrastructure TRI |
| Launch Date | 21-Nov-07 |
| Asset Size | Rs. 37 crore (As on Jan 31, 2019) |
| Expense Ratio | 2.76% (As on Dec 31, 2018) |
| Minimum SIP Investment | Rs. 500 |
| Minimum Lumpsum Investment | Rs. 5000 |
| Return Since Inception | 3.70% |
| Exit Load | 1% for redemption within 365 days |
Who Should Invest in Infrastructure Sector Mutual Fund?
Investors who are keen to invest in this sector funds are advised to check at least last 5 years’ performances of the scheme they have chosen along with its respective AUM (* should be more than 100 Cr). Also, one should not forget that these funds are sector-specific funds and such funds possess high risk. Thus, an investor who has a thorough knowledge of this sector and is experienced in equity investing should only invest in it.
- 100% Paperless
- No Transaction Charges
- Easy to Invest
- Safe & Secure
Summing Up
As clear from the above information, These top 3 infrastructure funds are suitable and advised to experienced investors who can read the market trends and time their investment to get the maximum returns. If a particular theme is on the rise, no other category of the scheme can generate a better return in the short span of time. If new investors want to invest in this scheme, they can take the assistance of MySIPonline regarding investment and get the perfect platform to enhance their hard-earned money via mutual funds.
If you have any concern regarding the mentioned schemes or any other regular mutual fund, drop us a message in the form provided below. We will be happy to answer. Also, if you have any set investment objective in mind, share your thoughts with us and we will guide you towards the right investment option.
