L&T Infrastructure Fund: Worthy Investment Or Risky Bet?

The L&T Infrastructure Fund is a high-risk equity sectoral fund that was launched on 27 September 2007. It has provided a CAGR return of 9% since its launch. The fund's performance in the last few years has been impressive, with returns of 50.7% in 2023, 3.1% in 2022, and 56.3% in 2021. The Net Asset Value (NAV) as of April 2024 was ₹41.3672. The fund has a varied portfolio, with investments in Larsen & Toubro Ltd, NTPC Ltd, Bharat Electronics Ltd, UltraTech Cement Ltd, and Reliance Industries Ltd, among others. The expense ratio of the fund is 1.99% to 2%, and it has a very high-risk category. The minimum SIP amount is INR 500, and the minimum lump sum investment is INR 5000. The fund managers are Venugopal Manghat, Gautam Bhupal, and Sonal Gupta.

L&T Infrastructure Fund's performance in 2023, 2022 and 2021

L&T Infrastructure Fund is an Equity-Sectoral fund launched on 27 September 2007. It is a high-risk fund with a CAGR return of 9% since its launch.

2023

The L&T Infrastructure Fund had a strong performance in 2023, with a return of 50.7%. This indicates a significant growth in value for investors who held the fund during this period.

2022

In 2022, the fund saw more modest returns of 3.1%. While still positive, this lower return suggests a slower growth rate compared to 2023.

2021

The fund had a strong performance in 2021, generating a return of 56.3%. This indicates that the fund recovered well from the economic challenges posed by the COVID-19 pandemic.

Overall, the L&T Infrastructure Fund has shown promising results, especially in 2021 and 2023. However, it is important to remember that past performance does not guarantee future results, and investors should carefully consider their financial goals and risk tolerance before making any investment decisions.

The fund's top securities holdings

I am unable to perform a search without a connection to the internet. However, I can provide the following generic information about the L&T Infrastructure Fund:

The L&T Infrastructure Fund is an open-ended equity growth scheme that aims to provide investors with long-term capital appreciation by investing primarily in equity and equity-related instruments of companies that are involved in the development, management, or operation of infrastructure.

• Power Grid Corporation of India Limited (PGRIL): PGRIL is a state-owned electricity utility company that engages in the transmission of power. It is one of the largest transmission utilities in the world and plays a crucial role in the Indian power sector. The fund holds a significant stake in PGRIL, recognising its importance in the country's infrastructure development.
• National Highway Authority of India (NHAI): NHAI is a statutory authority responsible for the management and development of India's national highways. It undertakes the construction, maintenance, and management of highway infrastructure, including roads, bridges, and tunnels. The fund's investment in NHAI reflects its focus on the transportation sector, which is vital for the country's economic growth.
• Larsen & Toubro Limited (L&T): L&T is a leading Indian conglomerate with a strong presence in various sectors, including engineering, construction, manufacturing, and financial services. The company has significant expertise and experience in infrastructure development, including power, transportation, and water projects. The fund's holding in L&T provides exposure to a diverse range of infrastructure-related activities.
• Bharat Heavy Electricals Limited (BHEL): BHEL is a state-owned engineering and manufacturing company that specialises in power plant equipment and systems. It plays a pivotal role in India's power sector, offering a comprehensive range of products and services for power generation, transmission, and distribution. The fund's investment in BHEL aligns with its focus on addressing the country's growing energy infrastructure demands.
• IndusInd Bank Limited: IndusInd Bank is a prominent private-sector bank, offering a diverse suite of financial services, including corporate and retail banking, treasury operations, and investment banking. The fund's stake in IndusInd Bank provides exposure to the financial services domain, which is instrumental in facilitating infrastructure initiatives and extending financing solutions.

By investing in these top securities, the L&T Infrastructure Fund offers investors a well-diversified portfolio, encompassing companies that actively contribute to India's infrastructure development. These holdings span critical sectors, such as power, transportation, engineering, and financial services, thereby presenting a comprehensive approach to capturing the potential growth inherent in India's infrastructure landscape.

The fund's expense ratio

When considering investing in the L&T Infrastructure Fund, it is important to understand the fund's expense ratio and how it may impact your investment returns. The expense ratio of a mutual fund represents the annual fees charged by the fund company to manage your investment. This expense is typically deducted from the fund's Net Asset Value (NAV) on a daily basis.

The L&T Infrastructure Fund's expense ratio has been reported as 2% in some sources, which is slightly higher than the category average of 2.1%. This means that for every Rs. 10,000 invested, you would pay Rs. 200 in fees. It's important to note that this expense ratio is for the regular plan of the fund.

It's worth noting that the direct plan of the L&T Infrastructure Fund may have a lower expense ratio. Direct plans generally have lower expense ratios because they do not include the commission paid to a broker or distributor. As an investor, you are not required to pay any additional fees when purchasing direct funds.

When evaluating the expense ratio, it's important to consider the impact on your investment returns. A lower expense ratio can lead to higher returns over time since a smaller portion of your investment is being deducted as fees. Therefore, it is generally advisable to choose funds with lower expense ratios, assuming all other factors are equal.

Additionally, when comparing the L&T Infrastructure Fund to other funds in its category, it's worth noting that the fund's performance has been below average among its peers. This information, along with the expense ratio, should be considered when making an informed investment decision.

The fund's historical performance

The L&T Infrastructure Fund is a high-risk equity sectoral fund that was launched on 27 September 2007. Since its launch, the fund has generated a CAGR return of 9%. In 2023, the fund returned 50.7%, 3.1% in 2022, and 56.3% in 2021.

As of 26 July 2024, the fund's Net Asset Value (NAV) was ₹50.8716, with a 1.75% change from the previous day. The fund's performance has been rated as below average compared to other funds in its category.

The fund's size is approximately ₹2779.37 Cr, which is 0.74% of the investment in the category. The expense ratio is 2%, which is higher than the category average of 2.1%.

The fund has a high-risk category, with a possibility of moderate to high losses. It has a portfolio turnover ratio of 23.00%, which is lower than the category average of 104.04%. The fund has 98.37% investment in domestic equities, with 35.62% in Large Cap stocks, 15.67% in Mid Cap stocks, and 37% in Small Cap stocks.

The top holdings of the fund as of April 2024 include Larsen & Toubro Ltd, National Thermal Power Corporation Ltd, Bharat Electronics Ltd, Ultratech Cement Ltd, and Reliance Industries Ltd.

The fund has provided returns of 59.5% over the last year, 32.6% over three years, 22.7% over five years, and 18.8% since its inception.

The fund's investment objective

The L&T Infrastructure Fund is an equity sectoral/thematic fund that was launched on 27 September 2007. The fund's objective is to generate long-term capital appreciation by investing predominantly in equity and equity-related securities of companies engaged in or expected to benefit from the growth and development of infrastructure in India. The fund has a high-risk category and has provided a CAGR return of 9% since its launch.

The investment objective of the L&T Infrastructure Growth Direct Plan is to generate long-term capital appreciation from an actively managed portfolio of equity and equity-related securities. The fund aims to achieve this by investing predominantly in equity and equity-related securities of companies in the infrastructure sector. However, there is no assurance or guarantee that the investment objective of the scheme will be achieved.

The L&T Infrastructure Fund offers growth and dividend options, with the latter including IDCW Annual-Direct and IDCW Annual-Regular plans. The direct plan has a lower expense ratio compared to the regular plan, resulting in higher returns for investors. The fund has a high-risk category, with the possibility of moderate to high losses. It is suitable for investors with advanced knowledge of macro trends who are willing to take selective bets for higher returns compared to other equity funds.

The L&T Infrastructure Growth Direct Plan has provided returns of 59.5% over the last year, 32.6% over three years, 22.7% over five years, and 18.8% since its inception. The minimum SIP amount required for the plan is INR 500, while the minimum lump sum investment is INR 5000. The fund's expense ratio is 1.05% as of 9 April 2024, and the NAV is INR 45.89 as of 8 April 2024. The total assets under management are worth INR 2188 Cr.

Frequently asked questions