HDFC Asset Management Company Ltd. (HDFC AMC) is one of India’s largest mutual fund companies. It is among one of the most profitable asset management companies (AMC) in the country. The company manages assets of over Rs. 5.5 Lakh crores (excluding domestic fund of funds) as of 31st December 2023. Let us talk about the consumer product – HDFC Infrastructure Fund.
About HDFC Infrastructure Fund
Investment Objective: The scheme aims to invest predominantly in a diversified portfolio of equity and equity-related securities of companies that are either engaged in or expected to benefit from the growth and development of infrastructure.
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Investment Process
The portfolio mainly invests in the following segments:
- Asset Financiers – Banks and infrastructure financing companies.
- Asset Creators – Engineering and construction companies.
- Asset Owners/Developers – Companies that own infrastructure projects.
The scheme may invest up to 20% of the funds in non-infrastructure-related companies. Also, there is no bias related to the market cap of the companies, and the scheme shall invest across all market capitalization.
Portfolio Composition
The fund holds 92.11% equity, 3.06% real estate, and 4.83% in Cash and cash equivalents. The top five sectors hold more than 77% of the equity portfolio.
Source: Value Research
Top 5 Holdings for Infrastructure Fund
| Name | Sector | Weightage % |
| J Kumar Infraprojects | Construction | 7.11 |
| Coal India | Materials | 6.21 |
| ICICI Bank | Financial | 6.20 |
| Larsen & Toubro | Construction | 5.64 |
| Premier Explosives | Capital Goods | 5.03 |
Source: Value Research
Past Performance
If one had invested Rs. 10,000 at the fund’s inception, it would now be valued at Rs. 37,776.
| Fund name | 1Y | 3Y | 5Y | 10 Y | Since Inception |
| HDFC Infrastructure Fund (%) | 55.42 | 38.54 | 18.86 | 14.90 | 8.77 |
| Benchmark Returns (%) | 61.08 | 41.24 | 22.65 | 16.09 | 9.12 |
| Additional Benchmark Returns (%) | 21.30 | 17.24 | 16.25 | 14.56 | 11.34 |
Benchmark – S&P BSE India Infrastructure Index (TRI), Additional Benchmark – NIFTY 50 (Total Returns Index)
Source: HDFC Mutual Fund
Fund Managers for HDFC Infrastructure Fund
Currently, the HDFC Infrastructure Fund is managed by the following fund managers.
- Mr. Srinivasan Ramamurthy is a Fund Manager – Equity and has collectively over 15 years of experience in equity research and fund management.
- Mr Dhruv Muchhal is a Senior Equity Analyst and Fund Manager for Overseas Investments
Explore More: HDFC Hybrid Equity Fund
Who Should Invest in HDFC Infrastructure Fund?
This product is suitable for investors who are seeking.
- To generate long-term capital appreciation/income
- Investment predominantly in equity and equity-related securities of companies engaged in or expected to benefit from the growth and development of infrastructure.
Why Invest in this Fund?
- As Infrastructure plays a critical role in India’s self-reliance and economic prosperity, receiving significant focus from the government an investor gets an opportunity to invest in India’s infrastructure space through asset developers, asset owners, and asset financiers.
- Investors can benefit from the growth and development of infrastructure due to increased budgetary capital spending and favourable policies.
The HDFC Infrastructure Fund has been in existence for the last 15 years. It provides an opportunity to invest in India’s infrastructure. The fund has consistently underperformed its benchmark. However, keeping in mind the government’s focus on infrastructure and capex requirements in India for the economy’s growth, the sector can show good performance in the upcoming future and can benefit the companies engaged in the sector. Hence, investors need to remain invested long-term to witness capital appreciation and outperformance with an understanding of high risk.
Disclaimer: This is not recommendation advice. All information in this blog is for educational purposes only.
