If you are looking for an investment option that provides stability, security, and growth, the Nippon Power and Infra Fund can be a great choice. This mutual fund is a part of the Nippon India Mutual Fund, one of the leading asset management companies in India. In this article, we will provide an overview of the Nippon Power and Infra Fund, how it works, its historical performance, benefits and risks of investing in it, how to invest in it, and how it compares to other infrastructure funds.
What is Nippon Power and Infra Fund?
The Nippon Power and Infra Fund is an open-ended equity mutual fund that invests in companies in the power and infrastructure sectors. It was launched in 2007 and has since then provided investors with a steady growth option. The fund invests in companies that are involved in the generation, transmission, and distribution of power, as well as companies that are involved in infrastructure development such as roads, ports, airports, and railways.
The fund is managed by Mr. Sanjay Doshi, who has over 23 years of experience in the financial industry. The fund has a diversified portfolio that includes both large-cap and mid-cap companies. The fund aims to provide long-term capital appreciation to its investors.
Overview of the Nippon Power and Infra Fund
The Nippon Power and Infra Fund has a sizeable asset under management (AUM) of over Rs. 2,400 crores. The fund has consistently delivered returns to its investors since its inception. The fund has an expense ratio of 1.94%, which is lower than the category average of 2.03%. The fund has a minimum investment amount of Rs. 5,000 and subsequent investments can be made in multiples of Rs. 1,000.
The fund has a high-risk profile due to its focus on the power and infrastructure sectors, which are highly regulated and dependent on government policies. However, the fund has a strong track record of outperforming its benchmark and peers. The fund has a 5-star rating from Morningstar and has won several awards for its performance.
How does the Nippon Power and Infra Fund work?
The Nippon Power and Infra Fund invests in companies in the power and infrastructure sectors. The fund manager uses a bottom-up approach to stock selection, which means that he focuses on the fundamentals of the company before investing. The fund manager looks for companies that have a strong business model, competitive advantage, good management, and growth potential. The fund manager also considers the regulatory environment, macroeconomic factors, and market conditions while making investment decisions.
The fund has a diversified portfolio that includes companies from various sub-sectors of the power and infrastructure sectors such as power generation, transmission, distribution, roads, ports, airports, and railways. The fund invests across market capitalizations and is not restricted to any particular market cap. The fund also has a sectoral allocation limit of 35%, which means that it cannot invest more than 35% of its assets in any particular sector.
Benefits of investing in the Nippon Power and Infra Fund
The Nippon Power and Infra Fund provides several benefits to its investors. The fund has a strong track record of outperforming its benchmark and peers. The fund has consistently delivered returns to its investors since its inception. The fund has a diversified portfolio that includes both large-cap and mid-cap companies. The fund has a high-risk profile, but it also provides the potential for high returns.
The fund has a low expense ratio, which means that investors can earn higher returns. The fund manager has a wealth of experience in the financial industry and has a proven track record of making sound investment decisions. The fund provides exposure to the power and infrastructure sectors, which are expected to grow in the future due to the government’s focus on infrastructure development.
Historical performance of the Nippon Power and Infra Fund
The Nippon Power and Infra Fund has consistently delivered returns to its investors since its inception. The fund has outperformed its benchmark, the Nifty Infrastructure Index, and its peers over the long term. The fund has delivered a CAGR return of 9.54% since its inception, while its benchmark has delivered a CAGR return of 6.56%.
The fund’s performance has been driven by its investment strategy, which focuses on companies with strong fundamentals and growth potential. The fund has a diversified portfolio that includes both large-cap and mid-cap companies, which has helped to manage risk and provide stability to the fund’s returns.
Risks and considerations when investing in the Nippon Power and Infra Fund
The Nippon Power and Infra Fund has a high-risk profile due to its focus on the power and infrastructure sectors, which are highly regulated and dependent on government policies. The fund’s performance is also dependent on the overall performance of the economy. The fund’s track record of outperforming its benchmark and peers may not necessarily continue in the future.
Investors should also consider their investment horizon, risk appetite, and financial goals before investing in the fund. The fund is suitable for investors who have a long-term investment horizon and are willing to take on higher risk for potential higher returns.
How to invest in the Nippon Power and Infra Fund
Investors can invest in the Nippon Power and Infra Fund through various channels such as the Nippon India Mutual Fund website, mobile app, or any authorized distributor. To invest in the fund, investors need to complete the KYC process and provide necessary documents such as PAN card, address proof, and bank details. Investors can invest in the fund through lump sum or SIP mode.
Comparison of the Nippon Power and Infra Fund with other infrastructure funds
When compared to other infrastructure funds, the Nippon Power and Infra Fund has outperformed its peers over the long term. The fund has consistently delivered returns to its investors and has a diversified portfolio that includes both large-cap and mid-cap companies. The fund has a low expense ratio, which means that investors can earn higher returns.
Frequently asked questions about the Nippon Power and Infra Fund
- What is the investment strategy of the Nippon Power and Infra Fund? The Nippon Power and Infra Fund invests in companies in the power and infrastructure sectors using a bottom-up approach to stock selection.
- What is the minimum investment amount for the Nippon Power and Infra Fund? The minimum investment amount for the Nippon Power and Infra Fund is Rs. 5,000.
- What is the historical performance of the Nippon Power and Infra Fund? The Nippon Power and Infra Fund has consistently outperformed its benchmark and peers over the long term.
- What are the risks associated with investing in the Nippon Power and Infra Fund? The Nippon Power and Infra Fund has a high-risk profile due to its focus on the power and infrastructure sectors, which are highly regulated and dependent on government policies.
Conclusion: Is the Nippon Power and Infra Fund a good investment option?
The Nippon Power and Infra Fund is a good investment option for investors who are looking for exposure to the power and infrastructure sectors. The fund has a strong track record of outperforming its benchmark and peers over the long term. The fund has a diversified portfolio that includes both large-cap and mid-cap companies, which has helped to manage risk and provide stability to the fund’s returns. The fund has a high-risk profile, but it also provides the potential for high returns. Investors should consider their investment horizon, risk appetite, and financial goals before investing in the fund.