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Why Investing in Thematic Fund is an Adventure?

Investors are always fascinated with new ideas when it comes to investments. Their love and experimentation are also on high spirits in recent times with more thematic funds and have seen very high inflows of money.

But is this category really delivers the returns and adds value to your portfolio?

Consider this Thematic Funds Returns chart for 1, 3 5 years.

*Source Credit – Value Research

  1. Expect IT as a thematic fund – None other schemes are delivering consistent returns in last 5 years
  2. IT is the only thematic fund has delivered 15% CAGR returns in last 5 year 
  3. Banking and PSU Themes are delivered negative returns in last 1 year

Thematic Fund investment is an adventure because it requires very higher risk appetite and complete conviction in that sector. This proposition ( High Risk and High Conviction ) is not suitable for most of the investors.

The investors who have substantial investment on all categories, having an appropriate asset allocation can look out for thematic fund choices. This investment is not suitable for beginners and normal investors. 

Remember the high returns are not based on funds or schemes – It is determined by Asset Allocation. Choose your Asset Allocation carefully and take home optimise returns.

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Sathish Kumar
Equity Fund Manager | Wealth Consultant | Author
Whatsapp / Call – +91 9841058689

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