Top Railway Focused Mutual Funds to Boost Your Portfolio

Have you ever thought about turning your belief in India’s growth story into a smart investment opportunity? Railway-focused mutual funds offer a promising way to do just that.

India’s rail infrastructure is undergoing a massive transformation, with fast trains, modern routes, improved freight systems, and large-scale expansion across the country.

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Now picture yourself participating in this journey, not just watching the progress unfold, but benefiting from it as an investor. Sounds exciting, right? If you’re looking for the top railway mutual fund options in India, you’re in the perfect place.

This blog breaks down key insights to help you stay on track toward financial growth.

Groww Nifty India Railways PSU Index Fund

Groww's Nifty India Railways PSU Index Fund represents India's first dedicated pure-play railway mutual fund, launched in February 2025. It tracks the Nifty India Railways PSU Index, providing exposure exclusively to listed railway public sector undertakings.

The fund's holdings are concentrated in core railway operators and logistics companies. IRFC (Indian Railway Finance Corporation) anchors the portfolio at 18.56%, followed by IRCTC (Indian Railway Catering & Tourism Corporation) at 18.3%, RVNL (Rail Vikas Nigam Limited) at 16.25%, Ircon Internationals at 4.63%, and CONCOR (Container Corporation of India) at 15.56%. This concentration provides pure-sector exposure without diversification benefits.

ICICI Prudential Transportation & Logistics Fund

ICICI Prudential's Transportation & Logistics Fund is India's largest and most diversified transport sector mutual fund, managing ₹3,072 crore in assets. Unlike the pure railway fund, this scheme invests across autos, ports, logistics, and rail-related companies, with rail exposure embedded within a broader transportation thesis. While not exclusively railways-focused, the fund holds meaningful exposure to key rail beneficiaries.

Major holdings include logistics operators and transport infrastructure players that benefit from railway freight expansion. The portfolio's diversification across the transport ecosystem reduces idiosyncratic risk versus a pure railway fund.

UTI Transportation & Logistics Fund

UTI Transportation & Logistics Fund, launched in January 2013, is the largest fund in the transport & logistics space with ₹4,067 crore under management. With a 12-year track record, it offers the deepest institutional expertise in transport sector investing among all transport-focused funds.

The fund invests across Consumer Cyclical and Industrials sectors with concentration in transport and logistics infrastructure. Key railway exposures include CONCOR and other logistics operators that benefit from dedicated freight corridor expansion. The portfolio's maturity and sector breadth reduce concentration risk.

Invesco India PSU Equity Fund

Invesco India PSU Equity Fund is a broad-based PSU equity fund that invests primarily in public sector undertakings across sectors including railways, power, defense, energy, and finance. While not railway-exclusive, the fund maintains a consistent 4.13% allocation to railway stocks.

The fund's railway exposure is strategic and diversified. Key holdings include BEML (3.19%) and IRCTC (0.94%), providing a balanced approach to railway PSU investing alongside exposure to rail companies.

The PSU diversity reduces single-sector risk. The fund's holdings in State Bank of India (9.67%), Bharat Electronics (8.54%), BPCL (7.21%), and power companies balance railway exposure. This provides regulatory stability and dividend yields unavailable in pure growth sectors.

Tata Nifty India Tourism Index Fund

Tata Nifty India Tourism Index Fund is a thematic index fund that tracks the Nifty India Tourism Index, giving exposure to companies linked to travel, tourism, hotels, airports and related services rather than to core transport or infrastructure.

The portfolio is dominated by InterGlobe Aviation (IndiGo), Indian Hotels, GMR Airports, Jubilant Foodworks, ITC Hotels and other hospitality/QSR/travel-services names, so its core risk is the tourism and discretionary spending cycle, not railways.

On the railway side, the fund currently has only one direct railway stock in the portfolio: Indian Railway Catering and Tourism Corporation Limited (IRCTC), with a weight of about 7.9%. This IRCTC position gives the fund limited but meaningful railway-linked exposure through catering, ticketing and tourism services built around Indian Railways, yet there is no exposure to other listed railway PSUs or rail infrastructure.

Tata Nifty India Tourism Index Fund is best viewed as a tourism-and-travel fund that incidentally carries roughly 8% railway exposure via IRCTC, rather than as a railway-focused mutual fund.

Conclusion

In conclusion, railway-focused mutual fund demonstrate India's ongoing commitment to develop its rail network through long-term infrastructure development efforts. The sector provides investors with a long-term growth opportunity because the government continues to invest money while freight traffic increases and the infrastructure network receives continuous improvements to stations and tracks and trains. The performance of these thematic investment funds remains unpredictable because their returns depend heavily on how well the government implements its plans and spends its funds. Investors who understand these market risks and accept periodic market changes can put their money into railway-focused investment funds which use secondary market investments to support India's infrastructure-based economic growth.