In the past five years, the government has given priority to investing in the infrastructure sector. According to government estimates, the total investments in the sector over the past six years ending FY19 stood at Rs 51 lakh crore. Now, the government’s recent announcement of investing Rs 102 lakh crore over the next five fiscals has generated a lot of focus on the sector.

Of the planned investments, 42% projects are already under implementation. These include expressways, freight corridors, river interlinking and renewable energy projects. The government’s renewed thrust should improve the pace of awarding projects, resulting in a strong order book for companies that are directly involved in the sector and also the proxy players. This throws up opportunities for retail investors seeking an exposure to this theme in their portfolio.

Among infrastructure-focused mutual fund schemes, Franklin Build India has been top performer in the past five-year and 10-year periods within the category of infrastructure-dedicated schemes. The fund has given returns of 8.6% and 13.7% in the past five-year and 10-year periods, respectively, while its peers have given average returns of 5% and 5.9%, respectively, over the same periods.

Portfolio change (past 6 months)

New entrants Complete exits Increase in allocation
Cochin Shipyard Hero MotoCorp ACC
Gateway Distiparks Power Grid
Corporation of India
Indian Oil Corp
M&M Financial Services Gain (India)

Returns (in %)

Period CAGR return Sector Infrastructure –
average CAGR
SIP CAGR returns
1 year 7.79 4.99 9.95
3 year 9.77 6.50 5.23
5 year 8.62 5.21 8.60

Portfolio composition (in %)

Fund Peers
Giant 59.90 33.85
Large 7.83 12.17
Mid 12.94 26.49
Small 22.33 28.31
Tiny 1.26
Return* 14.99

Source: Accord Fintech; compiled by ETIG Database
*Since launch

Expert Take

Rupesh Bhansali, head-mutual funds, GEPL Capital

A key element which distinguishes the scheme is fund manager Anand Radhakrishnan’s strategy to invest not only in companies which benefit directly from infrastructure, but also indirectly. Around 30% of the portfolio is dedicated to banks. There are also companies from cement and construction. Investors can consider it with a five-year horizon.

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