Best Infrastructure Mutual Funds to invest in 2022 [Post Budget]

Best Infrastructure Mutual Funds to invest in 2022 in IndiaBest Infrastructure Mutual Funds to invest in 2022

Government has been increasing spend on Infrastructure projects in the last few years. Such move is creating good opportunities in Infra sector. While picking up some of the infrastructure related stocks could be good, investing in direct equity is high risk. Here come infrastructure mutual funds. Infrastructure mutual funds have generated up to 80% returns in the last 1 year and are the top performing across equity funds. What are Infrastructure mutual funds? Which are the Best Infrastructure Mutual Funds to invest in 2022 that would benefit from government spending on Infra sector?

Also Read: Best Largecap Mutual Funds to invest in 2022

What are infrastructure mutual funds?

In simple terms, Infrastructure funds invest in companies that fall under the infrastructure category like construction, power, metal, capital goods, banks etc.,

Even banking stocks are considered by infrastructure funds as they provide direct funds for the infra sector.

Why Infrastructure Mutual Funds?

Infrastructure sector has been getting significant importance of union budgets. Even Budget 2022 has focused on development in the country. In this budget, Finance minister indicated large public investments in modern infrastructure. This would be guided by PM Gati Shakti which is an approach for economic growth and development driven by seven engines i.e. Roads, Railways, Airports, Ports, Mass Transport, Waterways and Logistics Infrastructure.

Are Infrastructure Mutual Funds riskier?

Infrastructure funds are sector mutual funds which focus only on one theme. These are cyclical in nature. Whenever government spending increases, such themes outperform and vice versa. Hence such infra sector mutual funds can be categorized as high risk high return funds.

Who should invest in Infrastructure funds?

If you are a high risk investor and willing to invest for short to medium term of 3-5 years, you can invest in such mutual funds.

If you are low risk or moderate risk taker, avoid these mutual funds.

What returns I can expect from Infrastructure mutual funds?

Infrastructure mutual funds could be volatile and hence it is difficult to assess the returns. Historically, these mutual funds generated 10% to 20% annualized returns in the last 10 years. In the short term to medium term, one can expect 15% to 20% annualized returns though not guaranteed.

How we filtered Infra funds?

Here is the category used to filter these funds.

1) Mutual funds that are investing based on infra theme are considered.

There are total of 21 infra funds in India.

2) Funds that generated consistent returns in the last 1 year, 3 years and 5 years are considered.

There are 17 funds that generated over 12% annualized returns during this time frame.

3) Funds are filtered based on 3 years rolling returns (since these are short term in nature). Funds that are consistent performing well based on rolling returns are given preference. Funds with high negative returns are avoided.

There are only 2 funds that have consistently generated wealth for investors (90% of the times) and with minimal negative returns (up to 10% of the times). There is 3rd fund, which is in border line generating positive returns for 88% of the times and negative returns of 12% of the times.

4) Funds with AUM of over 100 Crore.

There are only 2 funds that came-in. We reduced this to Rs 70 Crore as exception and we could see 3rd fund getting added. Overall 3 funds are short listed.

Best Infrastructure Mutual Funds to invest in 2022

Here is the list of Top Infrastructure funds to invest in 2022 in India.

#1 – Quant Infrastructure Fund

#2 – Invesco India Infrastructure Fund

#3 – BOI AXA Manufacturing & Infrastructure Fund

Best Infrastructure Funds to invest in 2022 – Detailed view

Let us check where does these fund invests, key ratios and performance.

#1 – Quant Infrastructure Fund

The mutual fund aims to invest predominantly in equity and equity related instruments of the companies in the infrastructure sector.

Key Ratios and Performance of the Fund

This fund has a low beta of 0.71. Beta refers to the volatility of the fund compared to its benchmark (which is 1). Any fund that has a beta of lower than 1 can be considered as less volatile compared to the benchmark.

This fund has an alpha of 20.24. Alpha is excess returns earned over the benchmark. Any fund that has alpha of more than zero can provide higher returns compared to benchmark.

Currently it invests in Adani Enterprises, L&T, Vedanta, ITC, Adani Ports, IRB Infra, ICICI Bank, SBI, Welspun Corp, Reliance Industries, VRL Logistics etc.,

From a 3 year rolling return perspective, this fund generated:

  • Over 12% returns – 40% of the times
  • Over 8% returns – 22% of the times
  • < 8% returns – 26% of the times
  • Negative returns – 12% of the times
Performance & Risk Metrics Quant Infrastructure Fund
Value Research Rating 5 Star
1 Year Returns 81%
3 Years – Annualised Returns 41%
5 Years – Annualised Returns 26%
1 Lac invested 3 years back is now 2.8 lacs
1 Lac invested 5 years back is now 3.2 lacs
AUM –  Crores 292
Risk Grade Average
Return Grade High
Beta 0.71
Alpha 20.24

This fund generated 17.6% annualized return since inception in 2013. It is one of the Best Infrastructure Mutual Funds to invest in 2022.

Also Read: Which Mutual Fund invests in upcoming IPOs and listed IPOs?

#2 – Invesco India Infrastructure Fund

This fund aims to generate long term capital appreciation by investing in a portfolio that is predominantly constituted of equity and equity related instruments of infrastructure companies.

Key Ratios and Performance of the Fund

This fund has a low beta of 0.74. Beta refers to the volatility of the fund compared to its benchmark (which is 1). Any fund that has a beta of lower than 1 can be considered as less volatile compared to the benchmark.

This fund has an alpha of 10.4. Alpha is excess returns earned over the benchmark. Any fund that has alpha of more than zero can provide higher returns compared to benchmark.

Currently it invests in L&T, Tata Power, Reliance, Bharti Airtel, PNC Infra, GR Infra, Bharat Electronics etc.,

From a 3 year rolling return perspective, this fund generated:

  • Over 12% returns – 38% of the times
  • Over 8% returns – 27% of the times
  • < 8% returns – 29% of the times
  • Negative returns – 6% of the times
Performance & Risk Metrics Invesco India Infrastructure Fund
Value Research Rating 5 Star
1 Year Returns 46%
3 Years – Annualised Returns 28%
5 Years – Annualised Returns 19%
1 Lac invested 3 years back is now 2.1 lacs
1 Lac invested 5 years back is now 2.4 lacs
AUM –  Crores 451
Risk Grade Below Average
Return Grade High
Beta 0.74
Alpha 10.40

This fund generated 18.59% annualized return since inception in 2013. It is one of the Top Infrastructure Funds to invest in 2022.

Also Read: 5 Multibagger Mutual Funds – 10x returns in last 10 years

#3 – BOI AXA Manufacturing & Infrastructure Fund

The MF scheme seeks long term capital appreciation through a portfolio of predominantly equity and equity related securities of companies engaged in manufacturing and infrastructure and related sectors.

Key Ratios and Performance of the Fund

This fund has a low beta of 0.65. Beta refers to the volatility of the fund compared to its benchmark (which is 1). Any fund that has a beta of lower than 1 can be considered as less volatile compared to the benchmark.

This fund has an alpha of 12.97. Alpha is excess returns earned over the benchmark. Any fund that has alpha of more than zero can provide higher returns compared to benchmark.

Currently it invests in L&T, Tube investment, Ultratech Cement, APL Apollo Tubes, Birla Corp, ABB, Hindalco, JSW Steel, NTPC, Grindwell Norton, Honeywell Automation etc.

From a 3 year rolling return perspective, this fund generated:

  • Over 12% returns – 30% of the times
  • Over 8% returns – 16% of the times
  • < 8% returns – 45% of the times
  • Negative returns – 9% of the times
Performance & Risk Metrics BOI AXA Manufacturing & Infrastructure Fund
Value Research Rating 4 Star
1 Year Returns 47%
3 Years – Annualised Returns 30%
5 Years – Annualised Returns 19%
1 Lac invested 3 years back is now 2.2 lacs
1 Lac invested 5 years back is now 2.4 lacs
AUM –  Crores 71
Risk Grade Low
Return Grade Above Average
Beta 0.65
Alpha 12.97

This fund has has a low AUM of Rs 71 Crore which is the negative point.

This fund generated 16% annualized return since inception in 2013. It is one of the Best Infrastructure Funds to invest in India.

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Suresh KP

3 comments

  • suryanarayanan natarajan

    Really disappointed seeing ICICI Bank, SBI, Reliance Industries, in quant fund. What is banking and next gen digital business doing in this fund?

  • Madhusudan

    Hi! Suresh, is Quant Mutual Fund house is Good. Can we go ahead to invest in various schemes. Almost all the funds are giving Excellent returns in the last 1, 3 & 5 years. But, surprisingly most of the Financial advisors are not suggesting Quant. Can you please throw some light on this please

    • All AMCs are safe for mutual fund investments. Quant funds has been providing high returns, however if you check rolling returns point of view, majority of them have given negative returns too compared to other funds. Hence some advisors might not be recommending them. Beyond this, I don’t see any reason

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