7 Best Performing Infrastructure Mutual Funds 2025 – 2026

With India’s rising Capital Expenditure and renewed private participation, the infrastructure sector is once again attracting strong investor attention. From green energy and transport corridors to digital connectivity, the next wave of growth is expected to come from infrastructure-linked companies — making these funds an exciting long-term theme.

The infrastructure story of India has always been a symbol of growth and resilience. From highways and power grids to airports and digital networks, every milestone has strengthened the country’s economic foundations.

Over the past decade, infrastructure as a theme has played a pivotal role in India’s development narrative. A major boost came when the government intensified its focus on connectivity, smart cities, logistics, renewable energy, and affordable housing.

This renewed focus has translated into higher capital expenditure, stronger investor confidence, and steady performance among infrastructure-linked companies. No wonder, infrastructure Mutual Funds are once again in the spotlight for long-term investors.

What are Infrastructure Mutual Funds?

Infrastructure mutual funds are sectoral Equity Funds that invest primarily in companies engaged in the development, construction, and operation of infrastructure projects.

These may include businesses in -

• Power and energy
• Metals and mining
• Construction and Real Estate
• Logistics and transportation
• Telecom and utilities

Because they are sector-specific, their returns are directly linked to how well India’s infrastructure sector performs.

💡 Example - When the government increases capital spending on roads and railways, stocks of construction, cement, and steel companies often see a rally — which benefits infrastructure funds.

Why Infrastructure Funds Are in the Spotlight

• Strong Government Push - Increased capital expenditure on transport, energy, and logistics networks.

• Private Participation - Growing PPP (Public-Private Partnership) projects across highways, ports, and airports.

• Rising Urbanisation - Demand for housing, power, and smart infrastructure is rising rapidly.

• Long-Term Growth Theme - India’s GDP expansion is directly tied to infrastructure capacity.

As a result, many top-performing infrastructure funds have delivered strong double-digit returns in the recent past.

7 Best Infrastructure Sector Funds in India FY 25 - 26

All the funds mentioned above are ideal, we are giving you detailed analysis of 5 funds.

Note: Always review the fund’s performance over multiple timeframes — 1 year, 3 years, and 5 years — to assess consistency.

How to Pick Best Infrastructure Funds to Invest

Some of the important parameters to choose a right infrastructure fund are:

1. Performance Consistency

Choose funds that have consistently outperformed their benchmark indices (like Nifty Infrastructure Index) across at least 4–5 years. Avoid being swayed by short-term returns.

2. Fund Size (AUM)

An ideal AUM should be neither too small nor too large. A mid-sized fund often allows better flexibility and liquidity.

3. Fund House & Manager Track Record

The experience of the fund manager and the credibility of the AMC matter greatly. Review how their other funds have performed in volatile markets.

4. Investment Horizon

Since infrastructure is a cyclical sector, investors should have a long-term horizon (ideally 5+ years) to ride out short-term Volatility.

5. Risk Profile

These are high-risk, high-reward investments. Investors with moderate-to-high risk tolerance and knowledge of equity markets are better suited for them.

Key Government Initiatives Supporting Infrastructure Growth

India has outlined several long-term initiatives to boost its infrastructure ecosystem. Some of the key focus areas include:

• National Infrastructure Pipeline (NIP) - A multi-trillion rupee plan to strengthen core infrastructure projects across the nation.

• PM Gati Shakti - A unified platform to coordinate infrastructure development across ministries for faster execution.

• Smart Cities Mission - Urban renewal and retrofitting initiatives for sustainable city development.

• Affordable Housing and Power for All - Continued emphasis on housing, roads, and electrification.

• Renewable Energy Expansion - Focus on solar, wind, and green hydrogen infrastructure.

Together, these initiatives aim to build the backbone for India’s economic growth in the decades ahead.

Should You Invest in Infrastructure Funds?

✅ Ideal For:

• Long-term investors (5+ years)
• Those who believe in India’s infrastructure growth story
• Investors seeking thematic exposure within their diversified Portfolio

🚫 Avoid If:

• You prefer short-term returns
• You have low risk tolerance
• You don’t track sectoral developments

Pro Tip - Limit exposure to 10–15% of your total equity portfolio to manage sector risk effectively.

How to Invest in Infrastructure Funds?

1. Open Free Investment Account for Lifetime at Fincash.com.

2. Complete your Registration and KYC Process

3. Upload Documents (PAN, Aadhaar, etc.). And, You are Ready to Invest!

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FAQs on Infrastructure Funds

1. Are infrastructure funds suitable for beginners?

A: Not ideally. These funds are best for investors who understand equity market cycles and can stay invested long term.

2. How are infrastructure funds taxed?

A: They are treated like equity funds — short-term gains (less than 1 year) are taxed at 15%, and long-term gains (above ₹1 lakh) are taxed at 10%.

3. How much should I invest in this theme?

A: Generally, not more than 10–15% of your total equity portfolio.

4. What is the benchmark index for these funds?

A: Most funds track the Nifty Infrastructure Index or S&P BSE India Infrastructure Index.