According to Veer Sardesai, a Pune-based financial planner, the country does require a lot of infrastructure development. From that standpoint, the fund’s theme has been chosen well. However, he says, a lot of infrastructure projects need government sanctions which may or may not be forthcoming. He also points out the risk of investing in such a fund. “A single theme is a riskier proposition than investing in a diversified equity scheme. For the average investor wealth building through equities takes place over a long horizon of as many as 10-15 years. A single theme is unlikely to do well over that long a period. For long-term wealth creation, invest in an equity diversified fund or an index fund.” He further cautions that not more than 20 per cent of your portfolio should be invested in such schemes, and you should invest with a horizon of at least three to five years.

If you have a good understanding of the infrastructure sector and are keen to participate in its growth, then by all means invest in an infrastructure fund. As mentioned earlier, investing in an NFO (as opposed to investing in an existing fund) does amount to a leap in the dark. However, if your goal is long-term wealth creation, stick to a diversified equity fund with a good track record or an index fund. u

niti.kiran@expressindia.com