Suited for seasoned investors who can handle cyclicality

The government's heavy spending on infrastructure and lower interest rates have failed to lift the performance of infrastructure funds. These funds lost 5.6 per cent in the year ended September 9, 2025, against a 1.8 per cent loss posted by flexicap funds.

- SARBAJEET K SEN

"2024 was a challenging one for the infrastructure segment. Due to the general elections, political focus shifted towards welfare measures. Infrastructure activity remained flat. Full-year spending fell short of market expectations, which led to the low performance of infrastructure funds," says Ravi Kumar TV, founder, Gaining Ground Investment.

Understanding infra funds Infrastructure funds invest at least 80 per cent of their corpus in companies from sectors such as energy, construction, railways, power, telecom, materials, services, and capital goods.

"India's infrastructure is supported by large-scale projects and government initiatives aimed at turning India into a global manufacturing centre. Major projects include industrial corridors, smart cities, highway expansions, electrification of rail networks, metro developments, ports, and a focus on sustainable and climate-resilient infrastructure," says Sachin Trivedi, fund manager (equity), UTI Asset Management Company (AMC).