Yes, the long awaited correction finally dawned on the stock market and the retail investor after being drawn into the glory and glitters of the market, has been left in the lurch, biting his nails and thinking what do I do now?

Investors must know, that the unbelievable rally that the market witnessed in the earlier weeks, was due to enormous amount of foreign money flowing into our economy in the form FII (foreign institutional investors) investment. The buying was helped by the strengthening Indian Rupee and good economic growth figures which urged the FIIs to invest in India amidst the US subprime crisis, which has taken a toll on many of the foreign investment banks.

One way of staying away from the volatility of the market, and still betting on the growth story of India, will be investing in infrastructure funds. Infrastructure funds have ruled the roost in the rally with almost all the funds doling out handsome returns over the year. These funds invest in companies that are a part of perennial sectors like construction, energy, telecommunications, power etc..., which hold the key to development of any economy around the world. These sectors enjoy maximum government support for development due to high gestation periods, huge investment outlay and primarily because the country`s growth relies on these sectors.

At present, there is a wide gap between the potential demand for infrastructure and the available supply. This is a challenge before the economy, and the government through private-public partnerships and FII participation, is trying to fill in the gap. The increased government impetus on infrastructure development and the superlative performances of the corporates provide a window of opportunity to Infrastructure funds.

An analysis of these funds will help us get a picture of how they have fared in the recent times. Let us look at the returns of infrastructure funds as on Oct. 19, 2007.

Canara Robeco Infrastructure notches the top slot with a 1-year return of 68.21%, followed by ICICI Prudential Infrastructure with 63.72% returns, UTI Infrastructure Fund with 62.89% and Tata Infrastructure Fund with 60.61% returns, as compared to their respective benchmarks` BSE 100, Senses, CNX Nifty, BSE 100 index returns of 40.08%, 40.08%, 41.8%, 40.08% respectively.

Even when compared on a shorter time horizon of 6-months, the funds have given impressive returns with Canara Rebeco Infrastructure being at the helm, with 52.20% returns, followed by Tata Infrastructure with 45.65%, UTI Infrastructure with 43.05% ICICI Prudential Infrastructure with 42.18% returns.

While analyzing the new entrants of infrastructure bandwagon, we find Taurus Infrastructure which has given 32.80% returns since its inception in April 2007, and SBI Infrastructure which has given 19.98% returns since its inception in July this year.

The above stated returns are at a time when the Sensex has tanked its worst in the last few days and stocks in the portfolios of these funds have taken a hit thereby affecting the overall returns of the portfolio. Now if we take a look at the returns of these funds as on October 15, when the Sensex was at its peak, we observe that, Canara Robeco Infrastructure has a 1 year return of 79.85%, followed by Tata Infrastructure with 74.99%, ICICI Prudential Infrastructure with 74.97% and UTI Infrastructure with 74.74%. Even the recently launched SBI Infrastructure delivered remarkable 3-month return of 32.34%.

Sanjay Sinha, CIO, SBI Mutual Fund elucidated, ``The SBI Infrastructure fund aims to capitalize on the fact that in the next 5-10 years, our country plans to create infrastructure on a much larger scale than what it has been able to do in the previous 50 years of planned development.``

``The Eleventh five-year plan has estimated outlay on infrastructure to be Rs 14.5 lakh crores, which will be equal to 7-8% of the GDP. Not only this, a substantial part of this spending will be through the public private partnership (PPP) route. This opens new investment opportunities for us as investors,`` he added.

Looking at the mammoth returns of their peers in the short term, Lotus Mutual Fund launched its maiden infrastructure fund and Tata Mutual Fund has come out with an Indo-Global Infrastructure Fund which provides an opportunity for the investors in India to benefit from the global infrastructure boom, as the fund will partner global organizations that will help in identifying opportunities abroad.

Finance minister, P Chidambaram on Thursday on an encouraging note, invited global investors affirming that the Indian market was vibrant and regulations were in place. In his attempt to simmer down the heat over the P-notes he said that it was important for investors to understand that volatility is an imbedded part of the market, and the issue of P-notes will have a bearing which would be short lived. However, the long term growth story of India is still intact and the recent steps taken by the SEBI for the betterment of the markets, is in the interest of investors and to protect the roots of our economy.

Therefore, if one holds faith in the fundamentals of the Indian economy, which have stood strong against all tidal waves, both domestic and global, infrastructure is the sector , wherein investors need to trust their money with.