The current year has seen unprecedented investment into India’s infrastructure. Notably, in the last ten years, India has spent Rs 60 lakh crore in infrastructure. Finance Minister Arun Jaitley pointed out recently that the government has increased its allocation to infrastructure in the next budget. “In recent time, the government has increased infrastructure spending”, he said, adding the Budget 2017-18 made allocation of Rs 3.96 lakh crore for infrastructure sector. This infra boost has helped a few mutual funds to post remarkable returns in 2017. Top market voices and investment experts alike point out that infrastructure space offers the next big opportunity for investors. India needs to spend at least Rs 50 lakh crore in next five years through the year 2022 to develop infrastructure, the country will see close to Rs 3,000 crore investment per day, says a recent CRISIL report. We take a look at two mutual funds which have returned more than 55% since January.
L&T Infrastructure Fund
L&T Infrastructure Fund has returned more than 60% in the year so far, making it the best performing fund in the category. A five star rated fund according to Value Research, the fund has posted marked outperformance compared to the Nifty Infrastructure benchmark. The fund has taken heavy allocation to the shares of L&T, Bharti Airtel, Graphite India, OCL, Sterlite Technologies and Bharat Electronics. “The investment objective of the scheme seeks to generate capital appreciation by investing predominantly in equity and equity related instruments of companies in the infrastructure sector,” says the investment objective according to their website. The fund has an expense ratio of 1.58% as on December 9th 2017.
IDFC Infrastructure Fund
This fund has returned more than 57% since January. Notably, the fund has taken heavy exposure to the shares of L&T, Bharti Airtel, NTPC, NCC and ONGC. A three star rated fund by Value Research, the fund has outperformed the benchmark by more than 20%. “This product is suitable for investors seeking investment predominantly in equity and equity related instruments of companies that are participating in and benefiting from growth in Indian infrastructure and infrastructural related activities,” reads the investment objective of the fund. The fund has an exit load of 1% as on date.