With the aim of maintaining its thrust on the infrastructure sector, the Indian government recently announced it would spend close to Rs 20,000 cr in building roads in the North-Eastern states in the current financial year 2015-16. Reaffirming the significant potential of India´s infrastructure sector, the Royal Institution of Chartered Surveyors (RICS) in its report said that though India is currently ranked sixth with 5.3% share in the global infrastructure market, its share will go up to 9.8% and should be at fourth position by 2025. Meanwhile, in a bid to boost investments in the sector, the Reserve Bank of India (RBI) has allowed banks to invest in long-term infrastructure bonds issued by other banks.
In the mutual fund space, infra funds performed well in most periods of the analysis. However, they lagged the category benchmark CNX Infrastructure in the one-month period. In the three-month, six-month, one-year and three-year periods, these funds not only beat their benchmark index but also the market benchmark CNX Nifty by a wide margin. The funds´ performance was, however, weak in the five-year period in comparison to the market benchmark even though they beat the category benchmark in this period.
Within funds, DSP BlackRock Natural Resources and New Energy Fund was the best performer in the one-month period - down just 0.5%. SBI Infrastructure Fund - down 0.2% - topped the three-month period. Over six months, one year, three years and five years, Franklin Build India Fund emerged as the topmost performer with 14.15%, 77.77%, 36.42% and 19.52% returns, respectively.