In­fra­struc­ture Mu­tual Funds

What you need to know about them

Consumer Voice - - Contents -

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.

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