Are thematic funds good?

Last Update: April 20, 2022

This is a question our experts keep getting from time to time. Now, we have got the complete detailed explanation and answer for everyone, who is interested!

Asked by: Miss Rosemary Purdy
Score: 4.5/5 (63 votes)

So, if you are an investor who is looking for good returns in the long term, thematic funds can be a good option for you. However, it's recommended that first-time investors shouldn't directly jump into thematic funds at the start of their investment journey.

Are thematic funds risky?

It is advisable to own a diversified portfolio comprising of regular funds before going ahead with sector or thematic funds. Sector and thematic funds are known for their higher risk and volatility, which means investing more than 10% is a considerable risk for any investor.

What are thematic funds?

Thematic funds are equity mutual funds that invest in stocks tied to a theme. These funds are more broad-based then sectoral fund, as they pick companies and sectors united by an idea. For instance, an infrastructure theme fund will invest in cement, power, steel, among other sectors.

Is it good to invest in sectoral funds?

Sector mutual funds provide an opportunity for investors to invest in sectors that have a high potential to grow. These mutual funds provide attractive returns but generally if the investment timing is precise. The timing of investment in sector-specific funds is vital. Also, the exit from the fund becomes crucial.

Which SIP is best for 5 years?

Best SIP Plans for 5 Years in Equity Funds
  • Axis Bluechip Fund Monthly SIP Plan. This is an open-ended equity scheme with a track record of outperformance. ...
  • ICICI Prudential Blue chip Fund. ...
  • SBI Blue chip Fund. ...
  • Mirae Asset Large Cap Fund. ...
  • SBI Multicap Fund.

Why you should avoid thematic funds

18 related questions found

What are the top 5 mutual funds?

Here is the list of top 10 schemes:
  • Axis Bluechip Fund.
  • Mirae Asset Large Cap Fund.
  • Parag Parikh Long Term Equity Fund.
  • Kotak Standard Multicap Fund.
  • Axis Midcap Fund.
  • DSP Midcap Fund.
  • Axis Small Cap Fund.
  • SBI Small Cap Fund.

Is it right time to invest in pharma fund?

Though the longer term outlook for the sector is definitely positive, I believe that the near term upside may have been already captured. It would be more preferable to select a diversified fund with high pharma exposure or with more exposure towards the ingredients manufacturing space.

Who should invest in sectoral funds?

We always recommend that investors should have a diversified portfolio of regular funds before they consider investing in sector funds. Since you will be putting all your eggs in one basket, it is important to have a strong and balanced portfolio and limit your sector exposure to 5-10% of your portfolio value.

Is it good to invest in technology fund?

Technology mutual funds in India have consistently provided an annualized return of 15 percent to 19 percent over a five year period. With such a decent performance in the past, these funds are believed to deliver good returns in the future.

What is a thematic portfolio?

What is a thematic portfolio. ... The portfolios are built on innovative ideas that will not only allow investors to participate in some of the world's most promising investments, but also provide diversification to an overall portfolio.

What is a thematic ETF?

Thematic ETFs allow investors who don't want to do all the analytical work on individual companies to simply buy the industry or trend. ... By buying one share of the ETF you're buying a stake in all the companies in the fund, gaining quick exposure to the theme and a narrow diversification across the companies there.

Why are sectoral funds risky?

Since sector funds are exposed to a single sector and fewer number of stocks, they tend to carry higher risk as compared to a diversified equity mutual fund. ... Due to this high risk, financial planners believe investors should not allocate more than 5-10% of one's portfolio to a sectoral fund.

What is thematic equity?

Thematic investing – a source of sustainable capital growth. The primary purpose of a thematic equity strategy is to invest in assets whose returns are influenced by structural forces of change that evolve independently of the economic cycle.

Where do debt funds invest?

A debt fund invests in fixed-interest generating securities such as corporate bonds, government securities, treasury bills, commercial paper, and other money market instruments. The fundamental reason for investing in debt funds is to earn a steady interest income and capital appreciation.

Which sector is best to invest?

Top 5 Sectors to invest in, in 2021
  • - Banking: A number of sectoral mutual funds have increased their allocation in this sector of the economy, resulting in a higher proportion of banking and financial stocks in the market. ...
  • - Infrastructure: ...
  • - Pharmaceuticals: ...
  • - IT/ technology: ...
  • - Chemicals: ...
  • Conclusion.

Which pharmaceutical stock is best?

Top 10 pharma stocks to buy in India [2021]
  • Sun Pharmaceutical Industries Ltd. Sun Pharmaceutical Industries Ltd is a multinational Indian company situated in Mumbai. ...
  • Divi's Laboratories. ...
  • Dr Reddy Laboratories. ...
  • Cipla Ltd. ...
  • Biocon Ltd. ...
  • Torrent Pharmaceuticals Ltd. ...
  • AurobindoPharma Ltd. ...
  • Lupin Ltd.

Which MF gives highest return?

These funds invest in debt and money market instruments of maturity between 3 to 6 months.
  • ICICI Prudential Ultra Short Term Fund.
  • Mahindra Manulife Low Duration Fund.
  • Aditya Birla Sun Life Savings Fund.
  • Kotak Savings Fund.
  • SBI Magnum Ultra Short Duration.

What is Blue Chip Fund?

Blue chip funds are equity mutual funds that invest in stocks of companies with large market capitalisation. These are well-established companies with a track record of performance over some time. ... Blue Chip is commonly used as a synonym for large cap funds.