Infrastructure mutual funds to gain from higher budgetary allocation

Infrastructure sector gets a budgetary allocation of Rs 5.97 lakh crore in 2018-19, an increase of 21 per cent as against revised estimate of last year. “Infrastructure is the growth driver of economy. Our country needs massive investments estimated to be in excess of Rs 50 lakh crore in infrastructure to increase growth of GDP, connect and integrate the nation with a network of roads, airports, railways, ports and inland waterways and to provide good quality services to our people,” the finance minister said in his budget speech.

Government’s focus and higher allocation towards country’s infrastructure is expected to benefit investors who have already invested in the country’s infrastructure story. Mutual fund industry offers sector funds which invest specifically in stocks belonging to the infrastructure sector.

According to the data available, Infrastructure mutual funds have a total corpus of more than Rs 28,962 crore as on December 31, 2017. Apart from these sectoral mutual funds, there are other category of mutual funds which have a significant portion of their portfolio invested in infrastructure sector.


We looked at open ended equity schemes excluding infrastructure sector funds which have more than 10 per cent of their portfolio in construction sector (See table below).

Though infrastructure schemes and the schemes mentioned above which have significant holdings in infra sector are expected to benefit from the higher budgetary allocations, they may not be suitable for lay investors. Sector or thematic schemes are recommended to investors well-informed about the workings of the sector. Only sophisticated investors who have a high risk appetite and understanding, may look for sector specific schemes.