Ankit Sharma
Strategic investment decisions play a crucial role in helping investors capture various market opportunities over the course of their long-term wealth creation journey. Throughout this journey, several investment-related themes develop, unfold, reach their climax and get over in due course of time. Investing in such themes — be it innovation, healthcare, housing, consumption or infrastructure; is known as Thematic Investing.
Thematic Investment Boosts Yields
A developing investment theme brings with itself tremendous potential and adds great values to your portfolio overtime. The key is in grabbing such opportunities well in advance and positioning the portfolio accordingly to reap the full benefits while the theme unfolds. More importantly, thematic investing allows investors to stay ahead of the curve by capitalising on emerging opportunities.
Invest through Thematic Mutual Funds
While thematic investing sounds exciting, it comes with its own set of challenges. Identifying the right theme at the right time and understanding how different sectors are interlinked requires considerable research, awareness of macroeconomic indicators and sound judgment.
Moreover, emotions like greed and fear often cloud investment decisions. Many investors struggle with deciding when to enter or exit a theme. Further, re-allocating their corpus in a tax-efficient manner can be tricky. This is where professional fund management steps in. Mutual funds, backed by research and experienced fund managers, track evolving themes, invest at the right time and exit when the theme has played out – all while managing risk and tax implications efficiently.
Conclusion
Incorporating thematic funds into your portfolio can make your wealth creation journey more rewarding. However, it’s important to remember that while thematic investing offers high reward potential, it also carries higher risk. It’s best to allocate a suitable portion of your investment corpus to thematic funds, complementing your core long-term investments.
One such option investors can consider is the ICICI Prudential Thematic Advantage Fund (FOF). This fund of fund scheme invests in a diversified mix of sectoral and thematic funds, providing broad-based exposure to high-potential themes. As of May 30, 2025, the fund delivered a solid one-year return of 20.85%, with CAGR returns of 21.38% over three years and an impressive 28.74% over five years.
(The writer is Co-Founder, Financial Mart, J&K)
