The below table shows a list Of the Best Thematic Mutual Funds Based on AUM, NAV, and minimum SIP.
| Name | AUM (Cr) | NAV (Rs) | Minimum SIP (Rs) |
| ICICI Pru India Opp Fund | 22,658.80 | 37.98 | 500.00 |
| HDFC Manufacturing Fund | 13,003.01 | 11.24 | 100 |
| ICICI Pru Business Cycle Fund | 11,214.91 | 24.52 | 500 |
| ICICI Pru Manufacturing Fund | 6,620.99 | 38.15 | 500 |
| SBI ESG Exclusionary Strategy Fund | 6,046.23 | 264.47 | 1,500.00 |
| Axis India Manufacturing Fund | 5,909.15 | 14.68 | 500 |
| Aditya Birla SL PSU Equity Fund | 5,823.01 | 39.55 | 500 |
| ICICI Pru Innovation Fund | 5,748.42 | 18.42 | 100 |
| SBI PSU Fund | 4,601.76 | 37.42 | 1,500.00 |
| Franklin India Opportunities Fund | 4,575.97 | 279.52 | 500 |
Introduction to Thematic Mutual Funds
ICICI Prudential India Opp Fund
ICICI Prudential India Opportunities Fund Direct-Growth is a Thematic mutual fund scheme from ICICI Prudential Mutual Fund. This fund has been in existence for 5 years and 8 months, having been launched on 26/12/2018.
ICICI Prudential India Opportunities Fund Direct – Growth as a Thematic Mutual fund, manages assets valued at ₹22,658.80 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 31.96%. This fund has an exit load of 1% and an expense ratio of 0.57%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity 80.57%, Debt 2.51% and Other 16.92%.
HDFC Manufacturing Fund
HDFC Manufacturing Fund Direct-Growth is a Thematic mutual fund scheme from HDFC Mutual Fund. This fund has been in existence for 4 months, having been launched on 26/04/2024.
HDFC Manufacturing Fund Direct – Growth as a Thematic Mutual fund, manages assets valued at ₹13,003.01 crores. This fund has an exit load of 1% and an expense ratio of 0.37%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity 88.74%, No Debt and Other 11.26%.
ICICI Prudential Business Cycle Fund
ICICI Prudential Business Cycle Fund Direct-Growth is a Business Cycle mutual fund scheme from ICICI Prudential Mutual Fund. This fund has been in existence for 3 years and 8 months, having been launched on 29/12/2020.
ICICI Prudential Business Cycle Fund Direct – Growth as a Thematic Mutual fund, manages assets valued at ₹11,214.91 crores. Over the past 3 years, it has achieved a Compound Annual Growth Rate (CAGR) of 26.55%. This fund has an exit load of 1% and an expense ratio of 0.73%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity at 85.38%, Debt at 1.8% and Other at 12.82%.
ICICI Prudential Manufacturing Fund
ICICI Prudential Manufacturing Fund Direct-Growth is a Thematic mutual fund scheme from ICICI Prudential Mutual Fund. This fund has been in existence for 5 years and 11 months, having been launched on 21/09/2018.
ICICI Prudential Manufacturing Fund Direct – Growth as a Thematic Mutual fund, manages assets valued at ₹6,620.99 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 31.08%. This fund has an exit load of 1% and an expense ratio of 0.66%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity at 97.66%, No Debt and Other at 2.34%.
SBI ESG Exclusionary Strategy Fund
SBI ESG Exclusionary Strategy Fund Direct Plan-Growth is a Thematic-ESG mutual fund scheme from SBI Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.
SBI ESG Exclusionary Strategy Fund Direct Plan-Growth as a Thematic Mutual fund, manages assets valued at ₹6,046.23 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 19.75%. This fund has an exit load of 1% and an expense ratio of 1.3%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity at 98.27%, No Debt and Other at 1.76%.
Axis India Manufacturing Fund
Axis India Manufacturing Fund Direct-Growth is a Thematic mutual fund scheme from Axis Mutual Fund. This fund has been in existence for 9 months, having been launched on 01/12/2023.
Axis India Manufacturing Fund Direct-Growth as a Thematic Mutual fund, manages assets valued at ₹5,909.15 crores. This fund has an exit load of 1% and an expense ratio of 0.29%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity at 98.21%, Debt at 0.91% and Other at 0.91%.
Aditya Birla SL PSU Equity Fund
Aditya Birla Sun Life PSU Equity Fund Direct-Growth is a Thematic-PSU mutual fund scheme from Aditya Birla Sun Life Mutual Fund. This fund has been in existence for 4 years 9 months, having been launched on 09/12/2019.
Aditya Birla Sun Life PSU Equity Fund Direct-Growth as a Thematic Mutual fund, manages assets valued at ₹5,823.01 crores. Over the past 3 years, it has achieved a Compound Annual Growth Rate (CAGR) of 43.77%. This fund has an exit load of 1% and an expense ratio of 0.43%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity at 98.22%, No Debt and Other at 1.78%.
ICICI Pru Innovation Fund
ICICI Prudential Innovation Fund Direct-Growth is a Thematic mutual fund scheme from ICICI Prudential Mutual Fund. This fund has been in existence for 1 year and 4 months, having been launched on 10/04/2023.
ICICI Prudential Innovation Fund Direct – Growth as a Thematic Mutual fund, manages assets valued at ₹5,748.42 crores. This fund has an exit load of 1% and an expense ratio of 0.65%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity at 95.14%, Debt at 0.16% and Other at 4.69%.
SBI PSU Fund
SBI Banking and PSU Fund Direct-Growth is a Banking and PSU mutual fund scheme from Sbi Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.
SBI Banking and PSU Fund Direct-Growth as a Thematic Mutual fund, manages assets valued at ₹4,601.76 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 30.98%. This fund has an exit load of 1% and an expense ratio of 0.73%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises No Equity, Debt at 96.43%, and Other at 3.57%.
Franklin India Opportunities Fund
Franklin India Opportunities Direct Fund-Growth is a Thematic mutual fund scheme from Franklin Templeton Mutual Fund. This fund has been in existence for 11 years and 8 months, having been launched on 01/01/2013.
Franklin India Opportunities Direct Fund-Growth as a Thematic Mutual fund, manages assets valued at ₹4,575.97 crores. Over the past 5 years, it has achieved a Compound Annual Growth Rate (CAGR) of 31.66%. This fund has an exit load of 0.5% and an expense ratio of 0.66%. According to SEBI, it falls under the Very High-risk category. The fund’s asset allocation comprises Equity at 94.5%, No Debt and Other at 5.5%.
Thematic Mutual Funds Meaning
Thematic mutual funds are investment vehicles that focus on specific themes or sectors expected to perform well due to emerging trends or long-term growth prospects. These funds invest primarily in companies that align with a particular theme, such as technology innovation, renewable energy or healthcare advancements.
Unlike traditional mutual funds, which diversify across various sectors, thematic mutual funds concentrate their investments on a single theme. This concentration aims to capitalize on the anticipated growth within that theme. However, it can lead to higher risk if the theme doesn’t perform as expected.
Investors in thematic funds should evaluate the underlying theme’s potential and the fund’s strategy. While these funds offer targeted investment opportunities with the possibility of substantial returns, they also carry higher volatility and risk due to their focused nature.
Features of the Best Thematic Mutual Fund India
The main features of the best thematic mutual fund in India include targeted investments in specific sectors, a clear investment strategy, strong historical performance and professional management.
- Targeted Investments: Focuses on specific sectors or themes like technology or healthcare, offering targeted exposure to high-growth areas.
- Clear Investment Strategy: Employs a well-defined approach aligned with the chosen theme, ensuring coherent investment decisions and goals.
- Strong Historical Performance: Demonstrates consistent returns over time, reflecting effective fund management and sectoral expertise.
- Professional Management: Managed by experienced fund managers who have expertise in the thematic area, ensuring informed and strategic investment choices.
Top Thematic Mutual Funds Based on Expense Ratio
The table below shows the Best-performing Thematic Mutual Funds Based on the highest to lowest expense ratio.
| Name | Expense Ratio (%) | Minimum SIP (Rs) |
| SBI ESG Exclusionary Strategy Fund | 1.3 | 1,500.00 |
| ICICI Pru Housing Opp Fund | 0.94 | 500.00 |
| ICICI Pru Commodities Fund | 0.86 | 100 |
| UTI Transportation & Logistics Fund | 0.83 | 500 |
| HDFC Business Cycle Fund | 0.78 | 500 |
| ICICI Pru Transportation and Logistics Fund | 0.74 | 1,000.00 |
| ICICI Pru Business Cycle Fund | 0.73 | 500 |
| SBI PSU Fund | 0.73 | 1,500.00 |
| HDFC Defence Fund | 0.71 | 500 |
| Tata Ethical Fund | 0.69 | 1,500.00 |
Best Thematic Mutual Funds Based on 3Y CAGR
The table below shows the Best Thematic Mutual Funds Based on the Highest 3Y CAGR.
| Name | CAGR 3Y (%) | Minimum SIP (Rs) |
| Aditya Birla SL PSU Equity Fund | 43.77 | 500 |
| SBI PSU Fund | 42.84 | 1,500.00 |
| UTI Transportation & Logistics Fund | 34.74 | 500 |
| ICICI Pru India Opp Fund | 32.22 | 500.00 |
| Franklin India Opportunities Fund | 31.71 | 500 |
| ICICI Pru Manufacturing Fund | 31 | 500 |
| ICICI Pru Business Cycle Fund | 26.55 | 500 |
| ICICI Pru Commodities Fund | 21.34 | 100 |
| Tata Ethical Fund | 18.62 | 1,500.00 |
| SBI ESG Exclusionary Strategy Fund | 15.38 | 1,500.00 |
List Of Thematic Mutual Funds Based on Exit Load
The table below shows Best Performing Thematic Mutual Funds In India Based on Exit Load, i.e., the fee that the AMC charges investors when they exit or redeem their fund units.
| Name | AMC | Exit Load (%) |
| UTI Transportation & Logistics Fund | UTI Asset Management Company Private Limited | 1 |
| Tata Ethical Fund | Tata Asset Management Private Limited | 0.5 |
| SBI PSU Fund | SBI Funds Management Limited | 0.5 |
| SBI ESG Exclusionary Strategy Fund | SBI Funds Management Limited | 1 |
| ICICI Pru Housing Opp Fund | ICICI Prudential Asset Management Company Limited | 1 |
| ICICI Pru Transportation and Logistics Fund | ICICI Prudential Asset Management Company Limited | 1 |
| ICICI Pru Innovation Fund | ICICI Prudential Asset Management Company Limited | 1.00 |
| ICICI Pru PSU Equity Fund | ICICI Prudential Asset Management Company Limited | 1.00 |
| ICICI Pru India Opp Fund | ICICI Prudential Asset Management Company Limited | 1 |
| ICICI Pru Manufacturing Fund | ICICI Prudential Asset Management Company Limited | 1.00 |
Thematic Mutual Funds Returns
The table below shows Thematic Mutual Funds Returns Based on 1Y return
| Name | Absolute Returns – 1Y (%) | Minimum SIP (Rs) |
| HDFC Defence Fund | 92.15 | 500 |
| ICICI Pru PSU Equity Fund | 86.43 | 500 |
| Aditya Birla SL PSU Equity Fund | 84.64 | 500 |
| SBI PSU Fund | 83.79 | 1,500.00 |
| Franklin India Opportunities Fund | 71.55 | 500 |
| ICICI Pru Transportation and Logistics Fund | 62.23 | 1,000.00 |
| ICICI Pru Manufacturing Fund | 61.93 | 500 |
| UTI Transportation & Logistics Fund | 58.1 | 500 |
| ICICI Pru Innovation Fund | 57.17 | 100 |
| ICICI Pru India Opp Fund | 48.77 | 500.00 |
Historical Performance of Thematic Funds
The table below shows Historical Performance Of Thematic Mutual Funds based on 5Y return
| Name | CAGR 5Y (%) | Minimum SIP (Rs) |
| ICICI Pru India Opp Fund | 31.96 | 500.00 |
| Franklin India Opportunities Fund | 31.66 | 500 |
| ICICI Pru Manufacturing Fund | 31.08 | 500 |
| SBI PSU Fund | 30.98 | 1,500.00 |
| UTI Transportation & Logistics Fund | 29.34 | 500 |
| Tata Ethical Fund | 25.02 | 1,500.00 |
| SBI ESG Exclusionary Strategy Fund | 19.75 | 1,500.00 |
Factors to Consider When Investing in Thematic Mutual Funds
When investing in thematic mutual funds, it’s crucial to consider several factors to ensure a good fit with your investment strategy. Key aspects include understanding the fund’s theme, evaluating past performance, assessing management expertise and aligning with your financial goals.
- Investment Theme: Ensure that the fund’s focus is aligned with your market outlook and interests, as a clear and relevant theme can provide targeted growth potential and match your investment preferences.
- Historical Performance: Analyze past returns and performance consistency. Strong historical performance can indicate effective management and potential for future growth, though past results are not guaranteed.
- Management Expertise: Check the experience and reputation of the fund managers. Skilled managers with a proven track record in thematic investing can better navigate sector-specific challenges and opportunities.
- Financial Goals: Match the fund’s risk profile and investment horizon with your personal financial goals. Ensure the thematic focus complements your long-term investment strategy and risk tolerance.
How to Invest in Top Thematic Funds?
To invest in top thematic funds, start by researching various funds and their themes to identify those aligned with your investment goals. Look for funds with strong performance records and experienced managers.
Next, use a brokerage account to invest in these funds. Many brokerage firms offer a range of thematic mutual funds, making it easier to compare options and invest directly.
Finally, monitor the fund’s performance and stay informed about the theme’s developments. Regularly review your investment to ensure it continues to meet your objectives and adjust your holdings as needed.
Impact of Market Trends on Top Thematic Mutual Funds
Market trends significantly impact thematic mutual funds by influencing the performance of the underlying sectors. For example, a surge in technology adoption can boost funds focused on tech innovations, leading to higher returns.
Conversely, if a trend loses momentum or faces economic challenges, thematic funds can suffer. For instance, a downturn in renewable energy policies could negatively affect funds invested in clean energy technologies.
Investors should stay updated on market trends and their potential impacts on thematic funds. Regularly assessing these trends helps in making informed decisions and managing risks associated with theme-based investments.
How Thematic Funds Perform in Volatile Markets?
In volatile markets, thematic funds can exhibit higher fluctuations compared to diversified funds. Their focus on specific sectors or themes makes them sensitive to market swings, potentially amplifying both gains and losses.
Thematic funds are more vulnerable to sector-specific risks during market turbulence. For example, if a technology theme faces sudden setbacks, the fund’s performance may decline significantly.
Despite potential short-term volatility, thematic funds can offer long-term growth if the underlying theme remains strong. Investors should be prepared for higher volatility and align their investment horizon with the theme’s expected performance.
Advantages of Investing in Thematic Mutual Funds
The main advantages of investing in thematic mutual funds include targeted exposure to specific sectors or trends, the potential for higher returns based on emerging themes, diversification within a chosen theme and alignment with long-term investment goals.
- Targeted Exposure: Thematic funds provide focused investment in specific sectors or trends, allowing investors to capitalize on targeted growth areas like technology or green energy. This concentration can enhance returns if the theme performs well.
- Potential for Higher Returns: Investing in emerging or high-growth themes can offer significant upside potential. As these themes gain traction, thematic funds can deliver higher returns compared to broad market funds, assuming correct theme selection.
- Diversification Within a Theme: Even though thematic funds focus on a specific sector, they still offer diversification within that theme. This reduces the risk associated with investing in a single stock or company, spreading risk across various related assets.
- Alignment with Long-Term Goals: Thematic funds can align with long-term investment goals, such as sustainability or technological innovation. This strategic focus helps investors stay committed to their investment strategy while potentially benefiting from long-term trends.
Risks of Investing in Thematic Mutual Funds
The main risks of investing in thematic mutual funds include sector-specific volatility, lack of diversification, dependency on theme performance and potential for higher costs. These risks can affect the stability and returns of your investment, particularly if the chosen theme underperforms or becomes obsolete.
- Sector-Specific Volatility: Thematic funds concentrate on particular sectors or trends, which can experience significant volatility. Economic downturns or sector-specific issues can lead to substantial losses, impacting overall fund performance.
- Lack of Diversification: While thematic funds diversify within a chosen theme, they often lack broad market diversification. This concentrated approach can expose investors to higher risk if the theme or sector faces challenges.
- Dependency on Theme Performance: The success of thematic funds hinges on the performance of the underlying theme. If the theme fails to deliver expected growth or becomes outdated, the fund may underperform compared to broader market indices.
- Potential for Higher Costs: Thematic funds may have higher management fees and expenses due to specialized research and management. These costs can erode returns, especially if the fund does not achieve its performance targets.
Contribution of Thematic Funds to Portfolio Diversification
Thematic funds contribute to portfolio diversification by adding exposure to specific trends or sectors that may not be well-represented in traditional diversified funds. This focused approach allows investors to tap into unique growth opportunities and potential returns.
However, due to their concentrated nature, thematic funds can also increase portfolio risk. Balancing them with other asset classes and investment types helps mitigate this risk, providing a mix of growth potential and stability.
Who Should Invest in Thematic Funds?
Investors with a higher risk tolerance and a long-term investment horizon are ideal candidates for thematic funds. These investors should be comfortable with potential volatility and have a strong belief in the future growth of specific sectors or trends.
Additionally, those who want to focus on emerging trends and capitalize on sector-specific growth opportunities might benefit from thematic funds. These investors need to research thoroughly and ensure the chosen theme aligns with their financial goals.
Impact of Fund Manager Expertise on Thematic Mutual Funds Performance
The expertise of a fund manager plays a crucial role in the performance of thematic mutual funds. Experienced managers can make informed decisions about sector trends, select promising investments and navigate market challenges effectively, enhancing the fund’s returns.
A skilled fund manager also helps mitigate risks by adapting strategies based on market conditions and theme developments. Their ability to analyze and anticipate changes in the thematic sector can significantly impact the fund’s overall performance and stability.
How Much Money Should I Invest In Thematic Funds?
The amount to invest in thematic funds depends on your overall financial goals and risk tolerance. It’s advisable to allocate a portion of your portfolio rather than a large sum, balancing it with more stable investments for risk management.
Consider investing an amount that aligns with your long-term investment horizon and belief in the theme’s growth potential. Regularly review and adjust your investment based on performance and changes in your financial situation.
FAQs – List Of Thematic Mutual Funds
A thematic fund in mutual funds invests in companies aligned with a specific theme or trend, such as technology or renewable energy. It focuses on sectors expected to grow due to these themes, offering targeted investment opportunities with the potential for high returns.
Top Thematic Mutual Funds #1: ICICI Pru India Opp Fund
Top Thematic Mutual Funds #2: HDFC Manufacturing Fund
Top Thematic Mutual Funds #3: ICICI Pru Business Cycle Fund
Top Thematic Mutual Funds #4: ICICI Pru Manufacturing Fund
Top Thematic Mutual Funds #5: SBI ESG Exclusionary Strategy Fund
These funds are listed based on the Highest AUM.
The Best Thematic Mutual Funds based on expense ratio include SBI ESG Exclusionary Strategy Fund, ICICI Pru Housing Opp Fund, ICICI Pru Commodities Fund and UTI Transportation & Logistics Fund.
Investing in thematic funds carries higher risk due to their focus on specific sectors or trends, which can be volatile. While they offer the potential for high returns, they may also experience significant fluctuations, making them less stable than diversified investments.
The best Thematic mutual funds based on the highest 3Y CAGR include Aditya Birla SL PSU Equity Fund, SBI PSU Fund, UTI Transportation & Logistics Fund, ICICI Pru India Opp Fund, and Franklin India Opportunities Fund.
To invest in the best thematic mutual fund, research top-performing funds and their themes. Use a brokerage account with Alice Blue to compare options and make your investment. Ensure the fund aligns with your financial goals and has a strong track record.
We hope you’re clear on the topic, but there’s more to explore in stocks, commodities, mutual funds, and related areas. Here are important topics to learn about.
Disclaimer: The above article is written for educational purposes, and the companies’ data mentioned in the article may change with respect to time. The securities quoted are exemplary and are not recommendatory.
