thematic mutual funds: Are thematic mutual funds actually adding value to your investment portfolio?

ESG themed funds—another big draw among investors— also run high exposure to the financials basket.

Synopsis

Investors are looking to invest in thematic MF schemes to add some value to the existing portfolio. However, most thematic funds are overcrowded and overlap with any diversified mutual fund schemes. Find out if the thematic mutual fund scheme takes a pure-play approach or offers a generic exploration of the theme.

Thematic mutual funds have found many takers in recent months. AMCs have managed to get investors to grab a big bite of niche flavours like business cycles, special situations and manufacturing, among others. Investors appear keen to get exposure to segments typically finding modest representation in traditional diversified equity funds. But are you really getting the differentiated exposure you crave?

If you are picking a dedicated theme fund

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