Infrastructure funds have topped the return chart and offered an average return of around 33.23% in three years, data crunching by ETMutualFunds showed. There were around 18 schemes in the infrastructure fund category that completed three years.
Top five schemes offered more than 35%. ICICI Prudential Infrastructure Fund, the topper in the category, offered 39.80%. Quant Infrastructure Fund gave 39.42% in three years.
HDFC Infrastructure Fund offered 37.86%. Bandhan Infrastructure Fund and DSP India T.I.G.E.R Fund gave around 35%.
Taurus Infrastructure Fund, the smallest scheme in the category based on assets managed, offered the lowest return of around 26.08% in three years. The scheme manages assets of around Rs 7.66 crore.
These schemes are benchmarked against S&P BSE India Infrastructure Index – TRI, Nifty Infrastructure – TRI, and S&P BSE 100 – TRI. Nifty Infrastructure – TRI and S&P BSE 100 – TRI offered 26.35% and 16.31% respectively in three years. Data for S&P BSE India Infrastructure Index – TRI was not available.
The infrastructure fund category has offered 22.99% in the five-year horizon. The category offered 19.37% in the 10-year horizon.
Infrastructure funds are meant for investors with a high risk tolerance. Thematic or sector schemes invest most of their corpus in a particular sector, and the performance of schemes is based on performance of the sector. That is why thematic or sector funds are recommended only to investors with thorough knowledge about the sector.
You should invest in these schemes only if you have a long investment horizon or have intimate knowledge about the sector to time the entry and exit in these schemes. Remember, every sector or theme can go out of fashion depending on the economic conditions. You should not make hasty decisions in those phases.
Note, the above exercise is not a recommendation. One should not make investment or redemption decisions based on the above exercise. One should always choose a scheme based on investment horizon, risk appetite, and goal.