What is a thematic fund? I’ve been investing Rs.10,000 for the past 15 months in three systematic investment plans (SIPs)—Rs.5,000 in HDFC Top 200, Rs.3,000 in ICICI Prudential Tax Plan and Rs.2,000 in UTI Mid Cap. I want to invest Rs.7,000 more. Which schemes should I select?
—Kavish Mitra
Every MF has an investment mandate that tells the fund manager how to manage the investors’ monies and where to invest. Equity MFs that invest in the stock market often have mandates that instruct the fund manager which segment of the market to invest in.
Thematic funds are those where the mandate specifies a particular sector or a handful of sectors from where they can pick stocks. For example, an infrastructure themed fund can pick stocks from sectors such as construction, engineering, manufacturing, telecommunications, among others. Such funds give an investor a focused exposure to a particular theme within a portfolio.
