The stellar performance by the infrastructure funds was mainly because “the performance of infrastructure funds in India since May 2019 can be attributed to several strategic initiatives and policies implemented by the government. Firstly, there has been a clear emphasis on infrastructure development, evident through flagship projects like Bharatmala, Sagarmala, the Smart Cities Mission and Har Ghar Jal Jeevan Mission etc.,” said Sagar Shinde, VP Research, Fisdom.
He added, “The budget outlay for key infrastructure sectors has witnessed a healthy growth of approximately 12% CAGR since 2019. Notably, allocations towards highways, railways, and water have experienced a notable 20% CAGR during this period. Overall, this multi-faceted approach has created a conducive environment for infrastructure funds, driving their performance since May 2019.”
Invesco India PSU Equity Fund, a PSU fund, offered 281.10% absolute return in the last five years of the Modi government. Nippon India Power & Infra Fund delivered 255.43% absolute return.
Manufacturing sector based funds also made it to the list of top performing sectoral/thematic funds. ICICI Prudential Manufacturing Fund offered an absolute return of 229.45% Mirae Asset Healthcare Fund and SBI Healthcare Opp Fund gave absolute returns of 212.90% and 205.94% respectively in the last five years of the Modi government. SBI Technology Opp Fund and SBI Magnum Comma Fund ensured 176.27% and 17,542% absolute returns respectively.
Aditya Birla SL Mfg. Equity Fund and Aditya Birla SL India GenNext Fund delivered 138.48% and 136.89% absolute returns respectively.
Out of 108 sectoral/thematic funds in the market in the said period, 72 sectoral/thematic funds offered three digit returns, 35 funds gave double-digit returns and only one fund gave negative return.
The only fund to offer negative returns was HSBC Brazil Fund. This international fund lost around 12.96% in the last five years of the Modi-led government.
Looking at the past performance, are you wondering which sectors/themes will perform better and will offer mutual fund investors the best returns in a possible Modi 3.0 government?
“We expect public sector undertakings, telecom, domestic cyclicals and infrastructure-related segments of capital goods, basic materials and power to do well,” hints Shinde.
“Infrastructure has been a major focus for the Modi government in the last 10 years. We will see further impetus and focus on the same. Further, the defence sector is likely to do well as unfortunately, India does not have friendly neighbours and the current government has shown in the past to retaliate as and when prompted to do so. India believes in non-violence, but rightfully not so, when instigated and when being taken advantage of. The PSU stocks are also likely to do well,” recommends Rajesh Minocha, a Certified Financial Planner (CFP), founder of Financial Radiance.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)
If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on [email protected] alongwith your age, risk profile, and twitter handle.