Infrastructure Funds and Sector Overview

Equity markets are on high for past few years and this has woken up the mutual fund industry which was in lull.
Because of stunning stock market performance, returns on lackluster mutual funds is also glittering.
This has prompted various AMC (Asset Management company) to mop up new money through various New Fund Offers.
Sectorial Funds can outperform the market if the particular sector is of current fancy.
Same is the case with Infrastructure.


Infrastructure in general has tremendous scope for growth as our country needs huge developments in that area.
Fund houses are trying to cash in on this boom.

Following list shows various sectorial/thematic infrastructure fund from various fund houses.

Fund
AIG Infrastructure & Economic Reform Fund
Birla Infrastructure Fund
Canara Robeco Infrastructure
DBS Chola Infrastructure Fund
Escorts Infrastructure Fund
HDFC Infrastructure Fund
ICICI Prudential Infrastructure Fund
Kotak Indo World Infrastructure Fund
Lotus India Infrastructure Fund
Principal Infrastructure & Services Industries Fund
Sahara Infrastructure Fund - Fixed Pricing
SBI Magnum Infrastructure Fund - Series 1
Tata Indo-Global Infrastructure Fund
UTI Infrastructure Advantage Fund
UTI Infrastructure Fund

Investors has lot of options to choose from. He/She needs to be prudent in making choosing the right fund of his choice.
Lot of money is coming to this sector and fundamentally this is good investment.
It can give sustained growth for few years to come.

As we have discussed about the rewards from this sector, we also need to address the risk.

Risks
High growth may not be sustainable and may slowdown.
Competition is increasing because of lot of interest.
Many Indian companies are in fray with multinational joining too in the race.
Margins are under pressure because of fight to bag the project under their banner.
This poses execution risks. Bidding lowest [sometime unreasonable low] poses high implementation risk.

Stocks
GMR Infra
Punj LLoyd
JP Associate
Bhel
L&T
RIL
Few Power Generation and Utility companies.


You can check the order book, execution capability and funding ability of the company before zeroing or finalizing any particular stock.

Hope now after reading this post you will be more informed about investing/diversifying into infrastructure stocks/funds