The infrastructure sector has seen a gradual double-digit increase in the recent past, encouraging many investors to bank on the opportunities within the sector. As the Indian government pours unprecedented resources into constructing highways and bringing more facilities, we see many investors flocking to this sector as a potential long-term wealth creation opportunity. In fact, such infrastructural growth has a multiplier effect on a nation's economy as well as capital gains of investors.

Aditya Birla Sun Life BSE India Infrastructure Index Fund, the upcoming infrastructure-focused NFO from Aditya Birla Sun Life Mutual Fund, may find resonance with investors’ long-term wealth creation goals.

Let’s understand why the infrastructure sector can be a high-potential investment option.

Read More: Aditya Birla Sun Life Infrastructure Index Fund NFO

What makes infrastructure a potential wealth-creation option?

The current decade has earmarked the rise of the infrastructure sector in India (although with a few bouts of underperformance). This can augur positive market sentiments for the infrastructural companies as well as ancillary industries with capitalistic opportunities in construction and engineering, utilities, energy, transportation, etc. Investors may find the following reasons appealing for the investment.

First, infrastructure growth can provide better modern facilities and promote easy livelihood for its citizens. Such development also attracts tourists, boosting small, local businesses.

Second, infrastructural development can provide job opportunities to many people, from construction workers to the technicians, positively bringing down the unemployment rate and increasing economic activity.

Third, it can facilitate smoother trade relations between India and international countries, making Indian products competitive on a global stage and increasing their economic value.

Fourth, better infrastructure can boost foreign investments. A country with efficient logistics, better transport networks, or reliable energy makes itself an opportunistic investment, bringing in capital and the latest technologies.

Investing as an index fund

Investing as an index fund can allow you to gain low-cost exposure to the entire sector without buying individual infrastructure stocks. If not for this affordability, investors would have to pay high costs associated to single infrastructure scheme. As a result, investors can get good-quality infrastructure stocks in one single index.

Investing now can be the wealth-creation opportunity

India stands at a pivotal moment, where every sector possesses massive growth potential for investors with long-term wealth creation goals. To substantiate, even the newspapers boom with the latest greenlit infrastructure projects.

Increased government policies and initiatives like Railway Line Electrification, Bharatmala Pariyojana, UDAN, and the Sagarmala Program can lay the foundation for economic expansion and create significant growth opportunities.

[Disclaimer – The article is intended for informational purposes only and does not imply any guarantee of returns or performance. While these government initiatives may support the growth of the sector, there is no assurance that they will have a positive or lasting impact on the sector’s or the scheme’s performance.]

India’s youth population is, undoubtedly, a significant workforce, ready to fuel development. In fact, it is one of the assets of the infrastructure sector. More youth population would mean higher demand for projects, which can bring spending and investment.

The optimism surrounding this sector can make it a good bet for long-term investments. As more projects are in the pipeline, we can expect more capex pouring in, which can benefit in the long run.

Also, the sector’s broader reach among different sub-sectors like railways, transport, roads, etc., can help cushion against market volatility, which can potentially increase capital gains.

Introducing upcoming NFO, Aditya Birla Sun Life BSE India Infrastructure Index Fund

Aditya Birla Sun Life Mutual Fund will launch its latest NFO, Aditya Birla Sun Life BSE India Infrastructure Index Fund, on November 14th, 2024. This NFO scheme offers a compelling way to invest in India’s infrastructure story by investing in the equities of the companies belonging to the sector. The market cap bifurcation is as follows: 61% in large caps, ~22% in mid-caps, and 17% in small caps.

The NFO aims to replicate the performance of the benchmark index, BSE India Infrastructure Total Return Index, the BSE index that tracks the performance of the domestic infrastructure industry selected from the BSE AllCap universe.

[Disclaimer - Aditya Birla Sun Life BSE India Infrastructure Index Fund (“Scheme”) is based on the BSE India Infrastructure Total Return Index. BSE® is a registered trademark of BSE Limited. The Scheme is not sponsored, endorsed marketed or promoted by, BSE or their respective affiliates. Please refer to the Scheme Information Document for disclaimers w.r.t. BSE India Infrastructure Total Return Index.]

Conclusion

Investing in the infrastructure sector can offer an opportunity for investors to be part of India’s growth journey. With strong government support, favorable demographics, and the overall liken stance towards sustainable projects, the sector has the potential to deliver better results in the future. By investing in the NFO scheme, Aditya Birla Sun Life BSE India Infrastructure Index Fund, investors with long-term wealth creation goals can get an entry in the high-growth potential sector.

Aditya Birla Sun Life AMC Limited/Aditya Birla Sun Life Mutual Fund is not guaranteeing/offering/communicating any indicative yield/returns on investments. Issuer(s) / Stock(s) and Sector(s) mentioned in the document are for the purpose of disclosure of the portfolio of the Scheme(s) and should not be construed as recommendation. The fund manager(s) may or may not choose to hold the stock mentioned, from time to time.

The article is intended for informational purposes only and does not imply any guarantee of returns or performance. Investors should consult their financial advisors if in doubt whether the product is suitable for them.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.