Infrastructure fund yields depend on govt expenditure, say analysts

Let managers of diversified equity funds decide exposure, avoid direct investment

Infrastructure funds have enjoyed a good run, rewarding investors with a category average return of 71.3 per cent over the past year. Fund managers say despite this run-up these funds could continue to do well over the next few years owing to higher government expenditure on infrastructure and the resu­mption of capital expenditure (capex) by the private sector.

Private capex could revive

Government spending is expected to be the key driver of this sector. “By 2025, the government (in public-private partnership mode) is expected to spend Rs 111 trillion on infrastructure, almost double the Rs 57 trillion it had spent