Infra funds rise 16% in three months on hope of big spending by govt

Infrastructure funds are enjoying a hot streak currently. On an average, the category has run up 16.80 per cent over the past three months. This makes it the second-best performer after banking, which is up 18.60 per cent, over the same period. The S&P BSE India Infrastructure Index is up 17.20 per cent, according to data from mutual fund tracker Value Research.

The primary reason for this runup is the expectation that the Modi government will, in its second term, provide a major boost to infrastructure. Moreover, giving out of tenders for new projects tends to stall prior to elections. This will resume now. Investors should, however, avoid investing more than 10 per cent of their equity portfolio in sector funds.