7 Top Infrastructure Mutual Funds to Invest in India’s Growth Story

India is a growing country and as an investor, you can invest in India’s Growth Story through Infrastructure mutual funds. As reported by Times of India, India’s infrastructure development is poised for a transformative phase leading up to 2047, coinciding with the centenary of its independence. The government has laid out ambitious plans to significantly enhance various infrastructure sectors, with an estimated investment of Rs 845-880 lakh crore (approximately USD 10.3-11 trillion) required from 2023 to 2047. This extensive investment aims to emulate the rapid infrastructure growth seen in countries like China, which focus on roads, railways, ports, and urban facilities.

While the government is focusing on India’s infrastructure growth, investors have the opportunity to grow their wealth by investing in the sector. In this article, we have included top performing infrastructure mutual funds from the top AMCs.

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What are Infrastructure Mutual Funds?

Infrastructure mutual funds are one of those funds that primarily invest in companies involved in the development, construction, and maintenance of infrastructure projects. Infrastructure funds concentrate their investments in the infrastructure sector. This targeted approach allows investors to benefit from increased government spending and economic initiatives aimed at enhancing infrastructure. These funds invest in a variety of sectors essential for a nation’s growth, including:

• Transportation (roads, railways, airports)
• Energy (power generation, renewable energy)
• Telecommunications
• Urban development (smart cities, housing projects)

These funds often provide higher growth potential compared to traditional equity funds due to the significant demand for infrastructure development driven by urbanization and industrialization.

There are several infrastructure mutual funds available in the market, but we found the best and top performing funds from the top AMCs. Here are the best infrastructure funds:

1. Invesco India Infrastructure Fund

Invesco India Infrastructure Fund is a great fund in infra sector and it has provided very impressive return in the last 10 years. This fund is highly rated as 5 stars by Morningstar and Value Research. For long-term investors, Invesco’s infrastructure fund has given 20.76% CAGR returns in the last 10 years. Not even on long-term, it also has given impressive return in short term. Here are 1 year to since inception CAGR returns of Invesco India Infrastructure Fund:

Timeframe	CAGR	Absolute Returns
1 year	65.64%	65.86%
2 years	48.65%	121.21%
3 years	31.43%	127.20%
5 years	34.51%	340.97%
10 years	20.76%	560.74%
Since inception	22.01%	941.47%

2. Quant Infrastructure Fund

Nowadays, most of the Quant funds are known for its higher return, which also increases the risk in certain market conditions. Like other funds of Quant, their Quant Infrastructure fund has outperform all other infrastructure funds in terms of return (438%) in the last 5 years (between 2019-2024). However, after the Quant front-running case, their most of the mutual funds started underperform. This is not the first time, the same thing was happened with Axis Mutual Fund. So, long-term investors should not hesitate because of these types of cases.

Most of the infrastructure mutual funds charges a higher expense ratio. Investors who prefer a lower expense ratio, can choose the Quant Infrastructure fund.

Timeframe	CAGR	Absolute Returns
1 year	58.80%	59.00%
2 years	38.00%	90.60%
3 years	29.61%	117.88%
5 years	39.87%	436.26%
10 years	21.27%	589.63%
Since inception	19.98%	752.86%

3. Canara Robeco Infrastructure

Canara Robeco Infrastructure is a thematic equity mutual fund focused on investing in companies related to the infrastructure sector. The fund try to generate long-term capital appreciation by primarily investing in equities of companies engaged in infrastructure development, such as those in construction, engineering, cement, power, telecommunications, and related industries.

Timeframe	CAGR	Absolute Returns
1 year	66.29%	66.52%
2 years	45.55%	112.06%
3 years	33.14%	136.17%
5 years	32.76%	312.99%
10 years	19.05%	473.00%
Since inception	19.42%	709.12%

4. Franklin Build India Fund

Franklin Build India Fund is also invest in India’s growing infrastructure companies to give investors benefit from the India’s growth story. Like other infrastructure funds, this fund is comes with higher volatility and risk. Not only infrastructure, most of the sectoral funds are riskier as they have the ability to give investors tripple digit returns within short term.

Franklin Build India Fund has provided highest return since inception, however its return is not consistent in last 3-4 years compared between 2013-2018. By the way, long-term investors should not worry about it as the fund has outperformed all other infrastructure funds in terms of return.

Timeframe	CAGR	Absolute Returns
1 year	55.40%	55.78%
2 years	48.16%	119.74%
3 years	30.65%	123.18%
5 years	31.11%	288.01%
10 years	21.32%	591.89%
Since inception	23.59%	1115.03%

5. DSP The Infrastructure Growth and Economic Reforms Regular Fund (Direct – Growth)

DSP The Infrastructure Growth and Economic Reforms Regular Fund also known as the DSP India T.I.G.E.R. Fund. Like other funds in this article, it is an open-ended equity mutual fund that primarily focuses on investments in sectors benefiting from India’s ongoing economic reforms and infrastructure development.

Timeframe	CAGR	Absolute Returns
1 year	63.62%	63.84%
2 years	51.00%	128.28%
3 years	34.32%	142.56%
5 years	32.26%	305.31%
10 years	20.09%	525.07%
Since inception	19.24%	695.31%

6. ICICI Prudential Infrastructure Fund

ICICI Prudential Infrastructure Fund has a good amount of return over the past few years. It has a higher AUM value then any other funds in mentioned in this article. Some investors consider higher AUM as a good sign of better return in a long run.

Timeframe	CAGR	Absolute Returns
1 year	56.55%	56.74%
2 years	47.36%	117.38%
3 years	34.03%	140.96%
5 years	33.54%	325.29%
10 years	18.94%	467.89%
Since inception	18.74%	656.92%

7. LIC MF Infrastructure Fund

LIC MF Infrastructure Fund is able to take place in this list. The fund performance is average in the last 10 years. However, from the last 3-4 years, this fund is able to outperform few other infrastructure funds. It has higher expense ratio then any other funds mentioned in this article. So, it may not attract those investors who prefer a lower expense ratio.

Timeframe	CAGR	Absolute Returns
1 year	72.97%	73.23%
2 years	50.12%	125.62%
3 years	34.74%	144.79%
5 years	31.51%	293.96%
10 years	18.19%	432.83%
Since inception	17.83%	591.20%

What is the Average return on Infrastructure Mutual Funds?

Infrastructure funds are sectoral/thematic funds. So, to get the average return, you can check its category average return in the last 10 years:

Timeframe	CAGR
1 year	42.47%
2 years	32.18%
3 years	19.06%
5 years	23.89%
10 years	15.54%

Should You Invest in Infrastructure Mutual Fund?

When it comes to infrastructure, you may think: “Are Infrastructure funds a good investment?” Well, it depends on the nation or country. As we are investing in India’s Growth Story, infrastructure funds are one of the fastest growing funds nowadays. The Union Budget for 2023-24 highlighted significant allocations for infrastructure, which may further enhance the growth potential of the infrastructure sector. India has already started developing and the infrastructure companies are playing a key role in the development. Investors who prefer investing in specific sectors, can consider an infrastructure fund in their mutual fund portfolio.

Infrastructure Fund vs Manufacturing Fund, Which is better?

When considering investments in mutual funds, infrastructure funds and manufacturing funds provide high growth opportunities and risks. Understanding their differences can help you make a perfect decision based on your financial goals and risk tolerance.

Differences Between Infrastructure and Manufacturing Funds

Feature	Infrastructure Funds	Manufacturing Funds
Investment Focus	Primarily invest in companies involved in infrastructure projects (e.g., roads, ports, power plants)	Invest in companies engaged in manufacturing activities across various sectors
Growth Potential	Higher growth potential driven by government spending and urbanization	Growth potential linked to domestic consumption and government initiatives like ‘Make in India’
Risk Profile	Generally high risk due to sector concentration and economic cycles	High risk due to cyclical nature and concentration in the manufacturing sector
Market Sensitivity	Sensitive to government policies and infrastructure spending	Sensitive to economic cycles, global supply chains, and domestic consumption trends
Investment Horizon	Suitable for long-term investors looking for growth from infrastructure development	Best suited for investors with a strong conviction in the manufacturing sector’s growth

Which is Better?

Determining which fund type is “better” depends on many factors:

• Investment Goals: If an investor look for exposure to government-driven growth in infrastructure, then infrastructure funds may be more suitable. On the other hand, if one believes in the potential of domestic manufacturing driven by consumption trends, manufacturing funds could be preferable.
• Risk Tolerance: Both fund types carry high risks due to their concentrated nature. However, manufacturing funds may be more susceptible to economic cycles and downturns, which make them potentially riskier during periods of economic instability.
• Market Conditions: The current economic environment plays a crucial role. For instance, if government spending on infrastructure is expected to rise, infrastructure funds might outperform. On the other hand, if manufacturing is poised for growth due to favorable policies or global supply chain shifts, manufacturing funds could be more profitable.

In simple terms, if your goal is to invest in India’s growth story, then Infrastructure funds could be a better choice. As we already mentioned at the top of the article, “The government has laid out ambitious plans to significantly enhance various infrastructure sectors, with an estimated investment of Rs 845-880 lakh crore required from 2023 to 2047.” India is growing rapidly, and the government is also supporting the infrastructure. So, as an investor, you can consider to do more research on infrastructure mutual funds instead manufacturing funds.

FAQs

Info! Do your own research before investing in any mutual funds.

That’s all the top and best infrastructure mutual funds. We hope you found this article helpful and informative. If you have any questions, just drop it below in the comments.