The five top schemes in the infrastructure mutual fund category are, Bandhan Infrastructure Fund-Reg(G), LIC MF Infra Fund-Reg(G), Quant Infrastructure Fund(G), Canara Rob Infrastructure Fund-Reg(G) and Invesco India Infrastructure Fund(G).
According to a Motilal Oswal report, May saw notable changes in the sector and stock allocation of funds. On a MoM basis, the weights infrastructure counters increased in mutual fund schemes along with other sectors like capital goods, metals and automobiles witnessing a similar trend. In value terms also infrastructure stocks witnessed the maximum increase in value, MoM.
While Association for Mutual Funds in India (Amfi) has clubbed sectoral and thematic funds, Ace Equities treats them as separate categories. According to Ace, there are 77 thematic funds, 62 Fund of Funds (FoF, overseas), 8 global and 5 MNC funds.
Among sectoral mutual funds, there are 21 schemes of banks & financials, 15 schemes of consumption theme, 4 of energy & power, 14 of pharma & health, 2 of service industry and 9 of technology. The average YTD returns by them are 6.89%, 13.90%, 22.71%, 14.65%, 11.04%, 6.11%. As for thematic funds, FoF(overseas), Global and MNC the YTD returns are at 18.83%, 6.80%, 7.96% and 13.35%, respectively.Investors are increasingly tilting towards sectoral or thematic mutual funds placing their bets in specific themes. They pumped-in over Rs 19,200 crore in net inflows, highest among its 10 other equity oriented mutual fund peers. The growing clout of this category is riding on investors’ interest in themes which offer higher growth potential, say experts.
Decoding reasons why infra-based themes are shining with higher returns, Adhil Shetty, CEO of Bankbazaar.com said that infrastructure development is expected to be a major focus of the Modi 3.0 government which has led to a higher inflow of funds. The government aims to boost economic growth through the rapid construction of roads, railways, and urban infrastructure, he said while highlighting that this theme promises long-term economic benefits.
He was of the view that thematic funds such as infra-oriented ones, offer investors the opportunity to capitalise on specific economic trends or themes. “Investors are increasingly seeking ways to enhance returns by investing in sectors expected to outperform due to favourable macroeconomic trends. The ongoing economic reforms have spurred interest in certain themes,” the Bankbazaar CEO added.
Sandeep Bagla, CEO, TRUST Mutual Fund is also quite optimistic about the infra space along with other notable potential money spinners like the defense, manufacturing and financial services. As the day of full Union Budget 2024 nears, Bagla sees the next 100 days crucial and one that would provide markets with clues about the intention and intensity of government reforms.
“To ensure that the domestic economy continues to grow in the future as well, the government will have to undertake a fresh spate of reforms in key inputs like land, labour, capital and technology. Infrastructure, defense, manufacturing, financial services etc are the sectors likely to be in focus,” he added.
The TRUST Mutual Fund CEO also attributed sectoral/thematic funds’ growing popularity to AMCs with strong marketing ability. They have been able to popularise themes like manufacturing and physical infrastructure among investors, he added.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
