In 2025, India’s real estate market is staging a robust revival, pulling in both seasoned investors and new entrants.
Amid the fluctuations in equity market due to geopolitical tensions, real estate has stepped in as a resilient performer, driven by robust housing demand, government policies, and robust earnings from realty-linked industries.
Mutual funds focused on real estate provide diversification, expert management, and the capacity to ride the entire real estate value chain.
These real estate-oriented mutual funds have come back into focus among investors.
Let’s consider five mutual fund schemes that are well-positioned to take advantage of India’s real estate bounce.
#1 Tata Housing Opportunities Fund
Introduced in September 2022, Tata Housing Opportunities Fund is managed by Tejas Gutka, a veteran fund manager with reputation for understanding sectoral trends and bottom-up stock selection.
Instead of just targeting real estate developers, the scheme extends its thematic approach. It covers housing finance, cement and construction materials, electricals, paints, home appliances, and other segments that are likely to gain from the housing boom.
The fund has a corpus size of Rs 5.19 bn and portfolio of 31 stocks.
The total exposure to real estate stocks is 15.94% of its assets. The top 3 holdings are Prestige Estates Projects Ltd. (5.77%), DLF Ltd. (3.96%), and Brigade Enterprises Ltd. (3.37%).
The portfolio is dominated by sectors such as banking (20.25%), construction materials (17.89%), realty (15.94%), and finance (13.2%).
Although it doesn’t have a long-term track record, the fund has the potential to capitalise on policy tailwinds, housing demand, and infrastructure growth.
#2 Taurus Infrastructure Fund
Taurus Infrastructure Fund was launched in March 2007 with the objective of tapping opportunities generated by India’s massive infrastructure push in areas such as roads, rails, realty, power, and urban development.
It has veteran fund manager N K Ranganathan at the helm, who has earned a reputation for his deep insight into cyclical and capital-intensive businesses.
In of the last 5 years, the fund has delivered a return of 24.14% CAGR due to the recovery in capital spending and increased demand for housing-related infrastructure.
The exposure to real estate stocks is 13.65% of its assets. The top holdings include Afcons Infrastructure Ltd. (5.14%), DLF Ltd. (3.41%), and TARC Ltd. (3.16%).
The sectoral exposures are led by crude oil (15.8%), infrastructure (14.14%), capital goods (13.14%), and telecom (12.46%).
This makes the fund well positioned to benefit from the growth of Indian infrastructure.
Although it might not be among the bigger funds in its category, its concentrated focus and nimbleness, has enabled it to outperform during upcycles.
#3 HDFC Housing Opportunities Fund
HDFC Housing Opportunities Fund belongs to one of India’s oldest and renowned AMCs.
It’s managed by Chirag Setalvad—one of the most consistent and quality-oriented fund managers in the industry.
It targets companies that gain from housing demand—cement, paint, tiles, electricals, and home financing to consumer durables.
The scheme has an AUM of Rs 12.79 bn. In the last 5 years, the fund has delivered a CAGR of 22.28%.
The total exposure to real estate stocks is 13.65% of its assets. The top 3 stock holdings include Prestige Estates Projects Ltd. (5.91%), Ashoka Buildcon Ltd. (1.87%), and Macrotech Developers Ltd. (1.35%).
Sector exposure is skewed towards construction materials, housing finance, consumer durables, and industrials.
But since the performance of the fund is tied to the housing cycle, it can lag in periods when real estate or consumption demand slows down.
#4 Bandhan Focused Equity Fund
Bandhan Focused Equity Fund, a multi-cap fund with high conviction that invests in up to 30 stocks with the objective of building a concentrated portfolio of top ideas of any market capitalization.
Its approach is to invest in companies with structural growth tailwinds and solid fundamentals, which makes it a dynamic option for long-term investors who desire quality rather than quantity.
Not a real estate fund per se, it nevertheless invests capital strategically into companies that are heavily embedded within the housing and infrastructure value chain.
The investment in real estate stocks is 8.92% of its assets. It’s two investments are the prominent real estate developer in South India, Prestige Estates (6.11%) and Signature Global (2.81%) whichspecialises in the affordable and mid-income housing segment in the NCR.
The sectoral distribution of the fund in construction materials, industrials, and financials, positions it to ride India’s residential property and housing finance growth.
#5 ICICI Pru Infrastructure Fund
ICICI Prudential Infrastructure Fund managed by Prashant Kothari adopts a combination of top-down and bottom-up stock picking.
It has a strong bias towards cyclical companies expected to gain from the revival of capital expenditure, urbanisation, and the infrastructure push by the government.
The fund, which was introduced in 2005, has survived several market cycles and became one of the most stable performers in the infrastructure segment.
As of 30 April 2025 it has an AUM of Rs 74.15 bn and has delivered a 5-year CAGR of 33.18%.
The sector-wise allocation to realty stocks is 7.9% of its corpus. The top holdings are NCC Ltd. (3.58%), Oberoi Realty (1.08%), and IRB Infrastructure Developers Ltd. (1.01%).
The portfolio is diverse across infrastructure (17.1%), building materials (9.6%), banking (9%), and logistics (7.2%).
The fund calibrates its strategy with changing sector dynamics to capture the growth in housing and infrastructure.
Performance of Top 5 Mutual Funds with High Real Estate Allocation
Past performance is not an indicator of future returns.
This list is not exhaustive.
The securities quoted are for illustration only and are not recommendatory.
Rolling Returns in %. Direct Plan – Growth option considered
(Source: ACE MF)
Conclusion
Thematic mutual funds focused on real estate do not assure smooth sailing, but they provide exposure to India’s structural infrastructure shift, which is supported by government policies, demographics, and long-term demand.
However investors need to remember that thematic funds are best approached with patience and purpose.
These funds are not intended for short-term investments or for trend-following. Rather, they are best for those investors with the ability to weather market cycles, handle interim corrections, and who seek substantial upside over 5–7 years.
Happy investing.
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#Table Note: Data as of 30 April 2025.
“Mutual Fund investments are subject to market risks. Read all scheme-related documents carefully.”