Thematic Mutual Funds

Thematic mutual funds are a type of investment fund that focuses on specific themes or trends believed to have long-term growth potential. Unlike sectoral funds that invest in a particular industry, thematic funds can span multiple sectors and industries that are connected by a common theme.

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ICICI Prudential Asset Management Company Limited HDFC Asset Management Co Ltd SBI Funds Management Ltd Kotak Mahindra Asset Management Co Ltd Nippon Life India Asset Management Ltd Aditya Birla Sun Life AMC Ltd Axis Asset Management Company Limited UTI Asset Management Co Ltd Mirae Asset Investment Managers (India) Private Limited Tata Asset Management Limited DSP Asset Managers Private Limited Bandhan Asset Management Company Limited DSP Investment Managers Private Limited HSBC Asset Management(India)Private Ltd IDFC Asset Management Company Limited Canara Robeco Asset Management Co. Ltd.Franklin Templeton Asst Mgmt(IND)Pvt Ltd Edelweiss Asset Management Limited Quant Money Managers Limited Invesco Asset Management (India) Private Ltd PPFAS Asset Management Pvt. Ltd Mirae Asset Mutual Fund Sundaram Asset Management Company Ltd Motilal Oswal Asset Management Co. Ltd Mirae Asset Global Inv (India) Pvt. Ltd Baroda BNP Paribas Asset Management India Pvt. Ltd.LIC Mutual Fund Asset Management Limited JM Financial Asset Management Limited PGIM India Asset Management Private Limited Daiwa Asset Mgmt. (India) Pvt. Ltd.Mahindra Manulife Investment Management Pvt. Ltd.Fund PineBridge Mutual Fund Union Asset Management Co. Pvt. Ltd.Baroda Asset Management India Limited Principal Asset Management Private Limited WhiteOak Capital Asset Management Limited Bajaj Finserv Asset Management Limited JPMorgan Asset Management India Pvt. Ltd 360 ONE Asset Management Limited Edelweiss Mutual Fund Bank of India Investment Managers Private Limited ITI Asset Management Limited Navi AMC Limited NJ Asset Management Private Limited ICICI Prudential Asset Mgmt.Company Limited Franklin Templeton Asset Management IDBI Asset Management Limited Quantum Asset Management Co Pvt. Ltd.Samco Asset Management Pvt Ltd Helios Capital Asset Management (India) Private Limited Groww Asset Management Ltd.Trust Asset Management Private Limited Taurus Asset Management Company Limited Shriram Asset Management Co Ltd Zerodha Asset Management Private Limited Old Bridge Asset Management Private Limited ING Investment Mgnt (India) Private Ltd.Baroda BNP Paribas Mutual Fund

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Advantages of Investing in Thematic Mutual Funds

Capitalizing on Emerging Trends
Thematic mutual funds allow investors to tap into specific, high-growth areas of the market. By focusing on long-term trends such as technology, healthcare advancements, or environmental sustainability, investors can potentially benefit from significant growth opportunities.
Diversification Within Themes
While thematic funds are focused on a particular theme, they typically invest across a variety of sectors and industries within that theme. This diversification can help mitigate risks associated with investing in a single sector.
Professional Management
These funds are usually actively managed by professionals with expertise in the theme. Fund managers conduct thorough research and analysis to select companies that are likely to benefit from the identified trend, adding value through their knowledge and experience.
Enhanced Returns
Thematic funds can offer higher returns compared to broader market funds if the selected theme performs well. Investing in emerging trends or disruptive technologies can lead to significant capital appreciation.
Alignment with Personal Interests
Investors can choose themes that align with their personal interests or values, such as sustainability or technological innovation. This alignment can make investing more engaging and satisfying.
Potential for Long-term Growth
Many thematic investments are based on structural changes in the economy that unfold over long periods. This long-term focus can provide sustained growth potential as these trends develop and mature.

Disadvantages of Investing in Sectoral Mutual Funds

Concentration Risk
Thematic funds focus on a specific theme, which can lead to a concentration of investments in a particular sector or group of related sectors. This lack of diversification can increase the risk if the theme underperforms or faces adverse conditions.
Higher Volatility
Due to their focused nature, thematic funds can be more volatile than broadly diversified funds. The performance of the fund is closely tied to the success of the chosen theme, which can result in significant fluctuations in the fund's value.
Market Timing Risk
The success of a thematic fund is highly dependent on the timing of the investment. If the theme is currently overvalued or if the expected trend does not materialize as anticipated, investors may face disappointing returns.

Points to consider before investing in Thematic Mutual Funds

Understand the Theme
Clearly understand the theme the fund focuses on, including its long-term relevance and growth potential, and how it aligns with macroeconomic trends.
Determine Your Investment Horizon
Be prepared to invest for the long term to ride out market cycles and realize the potential of the thematic investment.
Assess Your Risk Tolerance
Evaluate your ability to handle the higher volatility and concentration risks associated with thematic funds.
Research Fund Manager Expertise
Investigate the track record and experience of the fund manager in managing thematic investments.
Analyze Historical Performance
Review the fund's historical performance and compare it to relevant benchmarks to gauge its relative success.
Evaluate Tax Implications
Understand the tax implications of the thematic fund, including capital gains taxes and how distributions are treated.

How to Start Investing in Thematic Mutual Funds with INDmoney

Now that you have understood what Thematic Mutual Funds are, you need to know how easily you can start your investment with INDmoney. Just follow these simple steps given below, to start your mutual fund investment journey with us.

Step 1
Download the INDmoney app and create your free investment account by completing your KYC (Know Your Customer).
Step 2
Once your free investment account is ready, you can either search for an Thematic Mutual Fund or go to the mutual fund section and tap on Thematic Mutual Fund from Discover All Categories.
Step 3
Choose an Thematic Mutual Fund by looking at aspects like past returns, volatility, downside capture ratio, AUM, expense ratios, and underlying stocks and sectors.
Step 4
You can choose to set up a SIP in an Thematic Mutual Fund or even invest as a lump sum. Once you are on the individual Thematic Mutual Fund page, click from the bottom “One-time” for lump sum investment or “SIP” for a systematic investment plan.
Step 5
Choose the amount that you want to invest as SIP or Lump Sum.
Step 6
Set up payments. If you choose to set up SIP in an Thematic Mutual Fund, you can do a free automatic pay set up via bank mandate or UPI. If you choose to invest in lump sum (one-time) then you can pay via UPI, net banking, NEFT, or RTGS.