Tax Saving

Why investing in infrastructure based mutual funds may not be such a good idea?

With the hype around infrastructure, infrastructure bonds and infrastructure-focussed mutual funds are a hot commodity, with everyone wanting to invest in these funds Though infrastructure bonds may be invested in for tax saving, investing in infrastructure-based mutual funds may not be such a good idea.

The primary reason is poor returns. If we look at the table below,which gives returns by mutual fund category (equity diversified, tax saving, infrastructure-focussed, banking, balanced), infrastructure-focussed funds are the worst performers, whether we look at 1 year, 2 year, 3 year, 4 year or 5 year returns.

Thus, diregard the hype around the "infrastructure" theme, and invest in other fund categories, which give far better returns.

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