Should you invest in Infrastructure Mutual funds now?

Should you invest in Infrastructure funds now

Infrastructure stocks have not been performing well after the 2008 market crash. The new Government has indicated in its manifesto that it would mainly focus on Infrastructure development and construction. Such Infra development is going to provide enormous opportunities to companies which would directly or indirectly involved in infrastructure. However, identifying such companies to invest would be difficult at this point of time. Hence, infrastructure mutual funds would help you to overcome this. There are several reasons why you should invest in Infrastructure Mutual funds now to multiply your money. In this article, I would provide some insights about Infrastructure sector, how they are expected to perform well in next 4-5 years and why you should invest in Infrastructure Mutual funds now?

Also Read: Best Midcap/Smallcap funds to invest in 2014

What are Thematic Infrastructure Mutual Funds?

Infrastructure mutual funds are those which invests in stocks that either directly or indirectly involved in Infrastructure development. Companies which are into Energy, Real Estate, Power, Metals etc., would fall under the Infrastructure sector. Companies like Banking, Finance, Transportation, etc., would contribute indirectly to Infrastructure development. Infrastructure mutual funds would invest in all these stocks.

How is Infrastructure stocks performance in last 5 years?

Infrastructure stocks have crashed heavily in the 2008 market crash. Infrastructure mutual funds have seen the huge negative impact. Though Sensex has recovered and reached new highs, Infrastructure stocks are still lagging behind as there was no effort till now for Infrastructure development.

Why Infrastructure sector would boom in the next few years?

Infrastructure funds

New Government main focus as it indicated in its manifesto is for Infrastructure Development which has been neglected in the last few years. The focus would be constructing world class highways, modernization of national highways and airports, setting up gas grids and improvements in power sector etc.

Companies which are directly or indirectly contributing to the development of infrastructure would grow during Infrastructure development. Infra stocks have been underperforming in the last few years. During this process, such stocks are expected to perform better and its shares' prices can increase.

Private investment in Infrastructure development is currently at 30% and is expected to grow to 50% in coming years.

What are the best performing Thematic Infrastructure Mutual funds?

Below are some of the top infrastructure mutual funds which you can look to invest now.

Top 10 Infrastructure Mutual funds in India

Also Read: 4 Tips to maximise returns from SIP in mutual funds

Conclusion: Infrastructure sector outlook is positive. The new government is expected to focus on Infrastructure development in coming years. Hence, I feel investors can look to invest in these best infrastructure mutual funds for the next couple of years so that your money would grow at a faster pace. Instead of investing in lump sum investment, look to invest through SIP.

Happy investing in Infrastructure Mutual Funds !!!

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Should you invest in Infrastructure Mutual funds now

Suresh KP


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