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I am planning to invest in L&T Infrastructure fund growth. Can someone suggest?

Is it right decision to invest in this fund?

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3 Approved Answers

Pijush Kanti Biswas

L&T Infrastructure fund is a sector fund which has consistently outperformed its benchmark since its inception.

A sector fund is a mutual fund which invests in stocks of companies that operate in a particular industry or sector of the economy like Banking funds, Pharma funds, FMCG funds, etc.

Characteristics of a sector fund:

  • These funds are exposed to a single sector hence, the risk exposure is high.
  • Diversified portfolio funds comprise of different funds from different sectors and have flexibility to switch investments among sectors. But in case of sector fund, If a particular sector such as Infrastructure under performs, the fund manager has no option or flexibility to invest in other sectors.
  • These funds give the highest returns when a particular sector is at peak. If an investor feels that a particular sector will perform in future, investor can invest in that sector. Instead of investing in a particular company, they can choose sector and hence, the investment is diversified among various companies in the same sector.

Key points for L&T Infrastructure Fund is:

  • This fund has been rated as a 5-star fund by Groww.
  • AUM of close to ₹967 Cr.
  • Launched in 2007 so performance can be ease to judge.
  • Past 3 years return is 20.15% per annum
  • Has consistently outperformed its benchmark BSE S&P 100 and NIFTY 50 since its launch.
  • The top portfolio holdings of the fund include Larsen & Toubro Ltd., Graphite India Ltd., Petronet LNG Ltd., Bharat Electronics Ltd.etc.
  • The holdings are balanced across various sectors with maximum weightage given to industrial manufacture sector (30.8%).

L&T Infrastructure Fund is among the best sector fund available in market and with the make in India initiative by Indian Government, this sector bound to grow in future. But, if you are looking to start investing from long term, sector funds are not a good choice as their performance vary a lot. Sector performance depends a lot on macro factors specific to that sector like in infra government push is a big factor for infra sector to perform.

Some other good sector fund options are:

 Happy Investing!


Ishan

L&T Infra is infra sector focussed mutual fund that invest in shares of companies in infra sector


If you are looking to bet on infra sector considering government's push towards infra, L&T Infra is one of the best mutual fund in infra sector mutual funds. 


L&T being an infra company understands this sector very well and hence its able to invest good companies in this sector.


Overall, if you are looking to start investing fro long term, sector funds are not a good choice as their performance vary a lot. Sector performance depends a lot on macro factors specific to that sector like in infra government push is a big factor for infra sector to perform.

Groww

This is a sector fund - and hence carry sectoral risk. You can decide to invest if you understand the risk of the sector. The fund is good otherwise based on its past performance. 


Sector funds carry risk of the particular sector. They are not diversified across multiple sectors. This particular funds invest in infrastructure related companies. Example of such companies - Larsen & Toubro, Cummins India Ltd etc


"The scheme seeks to generate capital appreciation by investing predominantly in equity and equity related instruments of companies in the infrastructure sector."


Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.
Past performance is not indicative of future returns. Please consider your specific investment requirements, risk tolerance, investment goal, time frame, risk and reward balance and the cost associated with the investment before choosing a fund, or designing a portfolio that suits your needs.
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