5 Equity Mutual Funds with Higher Exposure to Infrastructure Stocks
August 10, 2023 Mutual Fund
Infrastructure is one of the key pillars of growth for any economy. Given India’s steadily rising population, there is a need for robust infrastructure development to meet the demands of the economy.
Over the past few years, the government has laid special emphasis on the growth of infrastructure by announcing higher capex outlays for the sector’s expansion along with projects such as Gati Shakti, the National Monetization Plan, and the National Infrastructure Pipeline. Under these projects, the government has undertaken various initiatives such as Bharatmala, Sagarmala, Smart City Mission, Housing for all, as well as the development of new railways, airports, and metros.
Thus, the infrastructure sector appears to be on the cusp of healthy long-term growth, which in turn will provide a fillip to employment and domestic consumption. The benefit of potential growth in infrastructure will also benefit related industries such as Banking & Finance, Engineering, Cement, Logistics, and Steel, to name a few.
As an investor, if you too wish to benefit from the government’s ambitious impetus to boost infrastructure, equity mutual funds can be your best bet.
In this article, we will look at the equity mutual funds with higher exposure to Infrastructure stocks.
Launched in March 2008, HDFC Infrastructure Fund aims to invest in equity and equity-related instruments of companies engaged in or expected to benefit from the growth and development of infrastructure.
As of June 30, 2023, HDFC Infrastructure Fund held 43.9% of its assets in large-cap stocks, 46.8% in small-caps, 6.4% in mid-caps, and the balance in cash and equivalents. HDFC Infrastructure Fund has an allocation of around 29% in companies directly engaged in infrastructure development. Apart from this, the fund holds exposure in sectors such as Banking & Finance, Engineering, Mining, and Power, among others, that are likely to be beneficiaries of the growth in infrastructure.
Top Infrastructure Stock Holdings of HDFC Infrastructure Fund
Data as of June 30, 2023
(Source: ACE MF)
In terms of infrastructure stocks, HDFC Infrastructure Fund has the highest allocation of 7.6% to Larsen & Toubro (L&T), followed by J Kumar Infraprojects, Kalpataru Projects International, Hindustan Construction Company, and GR Infraprojects, among others.
#2: Bandhan Infrastructure Fund
Launched in March 2011, Bandhan Infrastructure Fund aims to invest across the infrastructure value chain.
As of June 30, 2023, Bandhan Infrastructure Fund held about 38% of its assets in large-cap stocks, 37.4% in small-caps, 22.1% in mid-caps, and the balance in cash and equivalents. Bandhan Infrastructure Fund has an allocation of around 22.2% in companies directly engaged in infrastructure development. Apart from this, the fund holds exposure in sectors such as Engineering, Cement, Logistics, and Telecom, among others that are likely to be beneficiaries of the growth in infrastructure.
Top Infrastructure Stock Holdings of Bandhan Infrastructure Fund
Data as of June 30, 2023
(Source: ACE MF)
In terms of infrastructure stocks, Bandhan Infrastructure Fund has the highest allocation of 8.3% to L&T, followed by PNC Infratech, HG Infra Engineering, ITD Cementation, and NCC, among others.
#3: Aditya Birla SL Infrastructure Fund
Launched in March 2006, Aditya Birla SL Infrastructure Fund aims to invest predominantly in a diversified portfolio of equity and equity-related securities of companies that are participating in the growth and development of Infrastructure in India.
As of June 30, 2023, Aditya Birla SL Infrastructure Fund held about 41.5% of its assets in large-cap stocks, 33.5% in small-caps, 21.7% in mid-caps, and the balance in cash and equivalents. Aditya Birla SL Infrastructure Fund has an allocation of around 20.9% in companies directly engaged in infrastructure development. Apart from this, the fund holds exposure in sectors such as Engineering, Cement, Cement, Bank, Telecom, and Realty, among others that are likely to be beneficiaries of the growth in infrastructure.
Top Infrastructure Stock Holdings of Aditya Birla SL Infrastructure Fund
Data as of June 30, 2023
(Source: ACE MF)
In terms of infrastructure stocks, Aditya Birla SL Infrastructure Fund has the highest allocation of 8.5% to L&T, followed by PNC Infratech, NCC, HG Infra Engineering, Kalpataru Projects International, and GR Infraprojects, among others.
Launched in September 2007, HSBC Infrastructure Fund aims to invest predominantly in equity and equity-related securities of companies engaged in or expected to benefit from growth and development of Infrastructure in India.
As of June 30, 2023, HSBC Infrastructure Fund held 38.9% of its assets in large-cap stocks, 39.8% in small-caps, 19.1% in mid-caps, and the balance in cash and equivalents. HSBC Infrastructure Fund has an allocation of around 20.2% in companies directly engaged in infrastructure development. Apart from this, the fund holds exposure in sectors such as Engineering, Cement, Electricals, Logistics, and Power among others that are likely to be beneficiaries of the growth in infrastructure.
Top Infrastructure Stock Holdings of HSBC Infrastructure Fund
Data as of June 30, 2023
(Source: ACE MF)
In terms of infrastructure stocks, HSBC Infrastructure Fund has the highest allocation of 9.5% to L&T, followed by HG Infra Engineering, KEC International, PNC Infratech, and ISGEC Heavy Engineering, among others.
#5: Invesco India Infrastructure Fund
Launched in November 2007, Invesco India Infrastructure Fund aims to invest in equity and equity-related instruments of infrastructure and related companies.
As of June 30, 2023, Invesco India Infrastructure Fund held 39.2% of its assets in large-cap stocks, 35.8% in small-caps, 22% in mid-caps, and the balance in cash and equivalents. Invesco India Infrastructure Fund has an allocation of around 19.6% in companies directly engaged in infrastructure development. Apart from this, the fund holds exposure in sectors such as Engineering, Auto Ancillaries, Power, Cement, and Gas transmission, among others that are likely to be beneficiaries of the growth in infrastructure.
Top Infrastructure Stock Holdings of Invesco India Infrastructure Fund
Data as of June 30, 2023
(Source: ACE MF)
In terms of infrastructure stocks, Invesco India Infrastructure Fund has the highest allocation of 9.6% to L&T, followed by KNR Constructions, PNC Infratech, GR Infraprojects, and HG Infra Engineering.
Apart from this, several diversified equity mutual funds also hold significant exposure to infrastructure stocks. These include:
Invesco India Focused 20 Equity Fund
To Conclude…
The growth measures announced by the government to boost infrastructure growth in India will benefit companies engaged directly and directly in infrastructure development. However, it is important to note that the fortune of infrastructure stocks is tied to the fate of economic growth, meaning they are cyclical in nature. During phases of economic expansion, these stocks tend to perform better, but may falter when the growth weakens.
Therefore, Sector/Thematic mutual funds, such as those that invest predominantly in infrastructure stocks are only suitable for investors with very high risk appetite and the ability to time the entry and exit in the scheme based on the phases of economic growth.
This article first appeared on PersonalFN here
