With increasing projects in the infrastructure sector, ongoing bullet train project, expressway projects help the sector to grow in the past one year. But investing in the sector directly through equities is highly volatile on your portfolio. Thus, investors are suggested to invest in the sector through L&T Infrastructure Fund. The fund has performed exceptionally well in the past years to provide high returns to the investors. Therefore, the financial analysts of MySIPonline have researched about the fund whose details have been provided in the article below:
An Overview of L&T Infrastructure Fund G
The fund, which was launched in the year 2007 is significantly investing in the equity and equity related securities of the infrastructure theme companies. Currently, it is managing the assets of Rs 2,124 Cr as on Aug 31, 2018, with an expense ratio of Rs 2.41%.
L&T Infrastructure Fund is suitable for the investors who are assured about the industry and have a vast knowledge of it. This is because it is a cyclical sector, which also becomes volatile and provides negative returns as well if the market is not in its favour. Therefore, the scheme is suitable for the investors who have an appetite for tolerating high-risk on their principal amount as well as investment horizon of 3 to 5 years.
Sector Allocation of L&T Infrastructure Fund G
The fund maintains a diversified portfolio by investing across the market capitalisation as well as allocation assets in various sub-sectors. If we look at the sector allocation, as provided in the pie chart above, its significant diversification is in the cyclical and defensive sectors keeping a small corpus in the sensitive sectors.
Besides this, the average market capitalisation of the fund is Rs 22,592.60 Cr as provided on Sept 14, 2018. This capital is invested in the stocks of 50 companies, keeping the portfolio turnover ratio at 33%. This shows that the fund management team of L&T Infrastructure follows the strategy of buy and hold for investing and is highly focused on a limited number of stocks. This focused approach helps the research team of the fund to get in-depth knowledge of every company it is investing in.
Past Performance Analysis of L&T Infrastructure Fund G
As we can see from the table provided above, the fund has provided high compounded returns in the past years beating benchmark as well as category’s average. All these returns have provided the growth outlook to the fund.
As per the financial analysts of MySIPonline, the uptrend in L&T Infrastructure Fund growth can also be seen in its annualised returns. The fund has provided high returns to the investors even when the benchmark and peers were negative. This also shows that the fund can effectively manage the bearish markets and offer good returns to the investors.
The fund is investing with a blend of growth and value investment approach to pick the stocks which has helped the fund to earn high returns in both the market cycles. The considerable investment in various market caps has also helped it to generate high alpha by 11.53% over the past three years (as provided on Aug 31, 2018).
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