Synopsis: Infrastructure mutual funds have delivered strong long-term returns by investing in sectors such as construction, capital goods, power, and transport. The top funds have achieved a CAGR of 26% during the past three years because India’s infrastructure growth theme and government-led capital expenditure supported their performance.
Infrastructure mutual funds operate as thematic equity funds that direct their investments toward companies that work on infrastructure development projects. These funds benefit from government spending, economic growth, and supportive policy measures. The investment possibilities present substantial growth potential for investors who possess sufficient risk tolerance and plan to maintain their investments for an extended period.
What Are Infrastructure Mutual Funds?
Infrastructure mutual funds serve as sectoral equity funds, which direct their investments toward companies that specialize in infrastructure development. The fund invests in companies that operate in the power, construction, cement, capital goods, transportation, and utilities sectors.
The funds seek to achieve their investment goals through three main economic drivers, which include government expenditures, economic growth, and extensive infrastructure development projects. The funds exhibit higher price fluctuations because they concentrate their investments on one particular investment theme while traditional equity funds spread their holdings across multiple sectors.
1. LIC MF Infrastructure Fund
- NAV: ₹52.14
- AUM: ₹1,006.68 Cr
- Expense Ratio: 1%
- Exit Load: 1% (within 90 days)
- Performance Snapshot
- 3-Year CAGR: 26.3%
- 3-Year Absolute Return: 110.5%
- Category Comparison (3-Year)
- Fund 3-Year CAGR: 26.3%
- Equity Sector Category Average: 22.4%
- Outperformance: +3.9 percentage points
2. Bank of India Manufacturing & Infrastructure Fund
- NAV: ₹65.25
- AUM: ₹689.06 Cr
- Expense Ratio: 0.71%
- Exit Load: 1% (within 1 year)
- Performance Snapshot
- 3-Year CAGR: 24.2%
- 3-Year Absolute Return: 98.4%
- Category Comparison (3-Year)
- Fund 3-Year CAGR: 24.2%
- Equity Sector Category Average: 22.4%
- Outperformance: +1.8 percentage points
3. Canara Robeco Infrastructure
- NAV: ₹171.83
- AUM: ₹933.71 Cr
- Expense Ratio: 1.07%
- Exit Load: 1% (within 1 year)
- Performance Snapshot
- 3-Year CAGR: 24.0%
- 3-Year Absolute Return: 99.2%
- Category Comparison (3-Year)
- Fund 3-Year CAGR: 24.0%
- Equity Sector Category Average: 22.4%
- Outperformance: +1.6 percentage points
4. HDFC Infrastructure Fund
- NAV: ₹46.62
- AUM: ₹2,417.41 Cr
- Expense Ratio: 1.19%
- Exit Load: 1% (within 30 days)
- Performance Snapshot
- 3-Year CAGR: 23.2%
- 3-Year Absolute Return: 94.9%
- Category Comparison (3-Year)
- Fund 3-Year CAGR: 23.2%
- Equity Sector Category Average: 22.4%
- Outperformance: +0.8 percentage points
5. ICICI Prudential Infrastructure Fund
- NAV: ₹191.75
- AUM: ₹8,097.89 Cr
- Expense Ratio: 1.18%
- Exit Load: 1% (within 15 days)
- Performance Snapshot
- 3-Year CAGR: 21.1%
- 3-Year Absolute Return: 84.0%
- Category Comparison (3-Year)
- Fund 3-Year CAGR: 21.1%
- Equity Sector Category Average: 22.4%
- underperformance: -1.3 percentage points
Also Read: SEBI’s New Mutual Fund Rules 2026: Check How They Could Impact Your Portfolio
Comparison Table
| Fund Name | 3Y CAGR | Expense Ratio | AUM (₹ Cr) | Outperformance/underperformance |
| LIC MF Infrastructure Fund | 26.3% | 1% | 1,006.68 | +3.9% |
| Bank of India Manufacturing & Infrastructure Fund | 24.2% | 0.71% | 689.06 | +1.8% |
| Canara Robeco Infrastructure | 24.0% | 1.07% | 933.71 | +1.6% |
| HDFC Infrastructure Fund | 23.2% | 1.19% | 2,417.41 | +0.8% |
| ICICI Prudential Infrastructure Fund | 21.1% | 1.18% | 8,097.89 | -1.3% |
Note: The NAV, AUM, expense ratio, and the ratios mentioned for the funds are sourced from Groww as of 30th March 2026.
Risks You Must Know
Infrastructure funds experience significant fluctuations, which depend on three factors: government spending, interest rates, and economic conditions. They function as sector/thematic funds, which limit their ability to diversify across different investment sectors that broader equity funds offer.
The economic downturns and policy implementation delays lead to increased volatility for these systems. The performance of a fund depends on two factors, which include its sector allocation choices and the investment approach of its fund manager. The historical performance of an equity investment provides no assurance about its future returns
Who Should Invest
Infrastructure mutual funds are suitable for investors with a long-term investment horizon who are comfortable with high volatility. The investors want to invest in India’s infrastructure development while maintaining their diversified portfolio through thematic investment. The funds provide their best benefits to SIP investors who have the ability to endure market fluctuations.
Conclusion
Infrastructure mutual funds operate as investment vehicles that enable investors to capitalize on the economic growth of India through its ongoing development projects and current capital expenditure cycle.
Thematic investments should function as secondary investment positions for investors because their nature requires this treatment. Investors should match their investments to their risk tolerance levels while maintaining a consistent investment strategy throughout the long term.
Written By Ameet S
Disclaimer: The information provided in this article is for educational purposes only and should not be construed as financial advice or investment recommendation. Returns mentioned are based on historical performance and may not be sustained in the future. Mutual fund investments are subject to market risks, including potential loss of capital. Investors are advised to assess their risk appetite and financial goals and to consult a certified financial advisor before investing.
