Infrastructure Mutual Funds

What you need to know about them

Mutual fund advisors and financial planners believe that the infrastructure category will continue to offer good returns in the coming years. Indeed, the infrastructure sector is crucial for any developing economy and is certain to perform well in the long run. The question is: will it do well always? As with any other investment option, there are riders here as well. There are wise moves to make and well-advised precautions to take. Read on to get a handle on this most happening of investment options. To begin with, what constitutes ‘infrastructure' and why and in what proportion should you have infrastructure funds in your overall mutual funds (MF) portfolio?

Subas Tiwari & Gopal Ravi Kumar What are infrastructure funds? These are mutual funds that invest in the infrastructure sector or its ancillary companies that own, manufacture and operate infrastructure assets or infrastructure projects. The companies invested in these sectors could be directly linked to infrastructure (such as construction or production of capital goods) or indirectly benefit from sectors like banking and metal. Currently these funds are heavily tilted in their investments toward sectors like auto and auto ancillaries, banking and financial services, fast-moving consumer goods, telecom, constructions and projects, and petroleum and gas.