scripbox logo
    scripbox logo
    search iconsearch icon
    user avatarLogin
    • right-arrow
    • Mutual Funds
      right-arrow
    • Sectoral / Thematic Mutual Funds

    Sectoral / Thematic Mutual Funds

    Invest in the best sectoral / thematic funds recommended by Scripbox that are algorithmically selected that best suit your needs

    long term funds

    Long Term Wealth

    Top equity mutual funds for long-term goals

    5+ years

    short term funds

    Short Term Money

    Best debt mutual funds for short term investing

    1-5 years

    tax saving funds

    Tax Saver Plan

    Top ELSS funds to save tax the smart way

    Lowest lock-in

    emergency funds

    Emergency Money

    Top liquid funds for life's surprise expenses

    Under 1 year

    equity-funds

    See all equity funds

    Top Equity mutual funds for long-term growth

    Filters

    Reset Filters1

    Scripbox Opinion

    Fund Category

    EquityDebtHybridInternational EquitySolution Oriented

    Minimum Investment

    500+

    Fund House

    See 40 other fund houses

    Show advanced filters

    List of Sectoral Thematic Mutual Funds

    Sort by

    Sectoral / Thematic

    close
    Fund NameScripbox Opinion
    3Y CAGR
    Till Date CAGR

    Nippon India Pharma Fund (G)

    24.4%

    22.1%

    17.3%

    12.9%

    25.5%

    27.4%

    14.6%

    18.8%

    14.5%

    15.3%

    21.4%

    15.3%

    14.5%

    15.3%

    21.4%

    16.3%

    17.3%

    16.4%

    26.7%

    22.5%

    21.4%

    16.3%

    21.8%

    23.8%

    14.7%

    18.8%

    21.8%

    23.8%

    14.7%

    18.8%

    14.5%

    15.3%

    24.4%

    22.1%

    26.7%

    22.5%

    17.3%

    16.4%

    17.4%

    16.7%

    Achieve Life Goals

    Find funds that suit your investment objective
    my first crore

    My First Crore

    retire confidently

    Retire Confidently

    child-education

    Child Education

    dream planner

    Dream Planner

    PreviousNext

    Explore best mutual funds across categories

    Best Mutual Funds

    The best performing mutual funds to invest in 2021

    Best Equity Funds

    The best performing equity mutual funds to invest in 2021.

    Best Debt Funds

    The best performing debt mutual funds to invest in 2021

    Best ELSS Funds

    The best performing ELSS tax saving mutual funds to invest in 2021

    Best Liquid Funds

    The best performing liquid mutual funds to invest in 2021

    Best SIP FundsBest Debt FundsBest Diverisifed FundsBest Mid Cap FundsBest Tax Saver FundsBest Large Cap FundsBest International FundsBest Small Cap FundsBest Short Term FundsBest Index FundsBest Long Term FundsBest Multi Cap Funds
    How does Scripbox rate funds?

    Proprietary 4-step system to rate mutual funds

    We use a proprietary system to rate mutual funds and based on that make a recommendation or rate the fund as top ranked.

    What Scripbox recommendations mean?
    Scripbox algorithm recommends 2-4 funds for investment for an investment asset class such as large cap, diversified, liquid etc. When you invest for an objective, the algorithm suggests the appropriate asset class and funds.
    Track Record

    Track Record

    We look at consistent and long historical performance for our analysis.

    Fund Size

    Fund Size

    We look at the size of the fund with respect to other funds in the category. Larger funds are preferred.

    Sub-asset Class View

    Sub-asset Class View

    We check if the sub-category of the fund is recommended by us.

    Fund Performance

    Fund Performance

    Consistency of performance over various tenures is analysed for a relative performance stack.

    Track Record

    Track Record

    We look at consistent and long historical performance for our analysis.

    Fund Size

    Fund Size

    We look at the size of the fund with respect to other funds in the category. Larger funds are preferred.

    Impact of Interest Rates

    Impact of Interest Rates

    We check the relative interest rate risk of the sub-category of the fund. Lower the better.

    Credit Attractiveness

    Credit Attractiveness

    We check the credit quality of the underlying instruments present in the fund. Higher the better.

    Equity Funds

    Debt Funds

    How to invest in Sectoral / Thematic Mutual Funds?

    Investing through Scripbox is made easy and paperless. All you need to do is follow the below steps and start investing.

    choose long term plan

    Choose a plan

    Choose a plan to invest to start investingmore...

    create account

    Create an Account

    Create an account with Scripbox through a paperless process, to invest in this fundmore...

    invest online

    Invest online & transfer

    Invest via netbanking, UPI or through an SIP (eNACH mandate).more...

    track investments

    Track your investments

    Track, invest more and withdraw your investments through the Scripbox dashboardmore...

    scripmark
    The Scripbox Promise

    Scripbox has helped over 2500 people become millionaires in the last 9 years

    Start Investing Now
    fund selection

    Fund Selection

    You'll never have to worry about what funds to choose. We'll suggest what's best for you.

    continuous monitoring

    Continuous monitoring & alerts

    We will track our recommendations and suggest changes & fund exists whenever required.

    call assistance

    All week call assistance

    Our customer champions are available 7 days a week from 8AM to 8PM.

    annual reviews

    Annual reviews & rebalances

    We review your investments and make course corrections every year to make the best out of your investments

    What are Sectoral and Thematic Mutual Funds?

    Sectoral and thematic mutual funds are open-ended mutual funds investing at least 80% of the assets in a particular sector or theme. These funds are equity funds as they invest 80% of their assets in equity and equity-related instruments of a particular sector or a theme.

    They are very different from diversified equity mutual funds as they concentrate on investing in one particular theme. A sectoral fund, for example, focuses on a particular sector, like the banking fund invests in banking sector stocks. A thematic fund focuses on a specific theme or opportunity. For example, an ethical fund focuses on investing in Shariah-compliant stocks. A thematic fund can have stocks from multiple sectors and can be slightly more diversified than sectoral funds.

    However, sectoral and thematic mutual funds are more seasonal or cyclical. The funds give the best returns when that sector is in its growth stage. Any downturn in the sector can affect the fund negatively. Investors should practise caution while investing in sectoral and thematic mutual funds, and timing the exit from these funds is also very important.

    Advantages of Investing in Sectoral and Thematic Mutual Funds

    Following are the advantages of investing in Sector and Thematic Funds:

    High Growth Potential

    Sector and Thematic funds have high growth potential. In other words, if the chosen sector is performing well, the returns can be significant. Suppose the growth prospect of a particular sector or theme is in continual demand. In that case, the investment will be a fruitful one.

    Professional Management

    Professional fund managers manage sector and Thematic mutual funds. If an investor has confidence in one sector or theme and is unable to choose the companies to invest in, these mutual funds come to their aid. Professional management will help the investor to generate significant returns.

    Limitations of Investing in Sectoral and Thematic Mutual Funds

    Following are the limitations of investing in Sector and Thematic Funds:

    Diversification

    Sector and thematic funds invest in a particular sector or a theme, respectively. Therefore, portfolio diversification is limited to that sector or theme only. The growth potential may generate significant returns. However, a downturn may result in heavy losses. This is purely because of a lack of diversification. Investing in a particular sector is more or less synonymous to putting all eggs in one basket. However, suppose an investor is very confident about a sector or theme’s performance and understands the cyclic movements. In that case, the returns may be significant.

    Who should Invest in Sectoral and Thematic Mutual Funds?

    Sectoral and thematic mutual funds are cyclical in nature. Hence, investors who know the sector can invest in it. These funds lack diversification as they invest in a particular sector or theme. Therefore investors who already have a diversified portfolio and are looking at gaining from the potential boom in a specific industry can invest in these funds.

    Sector funds are highly volatile and are comparatively riskier than diversified mutual funds. Moreover, the entry and exit in these funds have to be appropriately timed. Hence investors who have a good understanding of risk and knowledge of these funds can consider investing in them.

    It is important to note that investors cannot have all their investments in sectoral and thematic mutual funds. Financial experts advise that an investor shouldn’t allocate more than 10% of their portfolio to these funds as it can be quite risky.

    Things To Consider Before Investing in Sectoral and Thematic Mutual Funds

    Sector or Theme Analysis

    It is essential to perform an in-depth analysis of the sector or theme before investing in the funds. From time to time, read about the industry or theme and follow analyst reports. These give a good insight. Furthermore, track the companies to see if they are actually churning good returns.

    Investment Duration

    While investing in a sector or thematic fund, one should have a long investment horizon. In other words, these are pure equity funds and hence highly volatile. Therefore, to overcome the effect of volatility, it is advisable to have an investment duration of at least five years.

    Investment exposure

    Consider investing in a sector or thematic funds only after having a well-diversified investment portfolio. Furthermore, one should limit their exposure in these funds to a maximum of 5% – 10% of their investment portfolio.

    Strict stop loss

    Since sectoral and thematic mutual funds are highly volatile investments, one should have a strict stop loss while investing in them. This will help in minimising the losses. In other words, having a stop loss target will help in timing the exit from the investment. If a sector fails to perform, then one should consider exiting their positions. A stop loss at around 15% – 20% levels is a good limit, and one should exit the fund without thinking twice.

    Returns and performance of the fund

    Often sector trends are cyclical. Therefore, it is wise to analyse the trend of a sector along with its historical performance. The phase of a sector can be an indicator of its future performance. Since sector and thematic funds are more focused funds, knowing their trends is very important. Though past returns do not guarantee future returns, it is good to analyse them to understand the fund’s performance over different market cycles. Also, look at the potential opportunities ahead for a particular sector or theme. 

    Financial Ratios

    Several financial ratios help in evaluating sectoral and thematic mutual funds. However, the following are a few of the key financial ratios that help in evaluating these funds:

    Alpha

    Alpha measures how well the fund has performed when compared to its benchmark. If the alpha is positive, it means the fund is delivering superior returns than its benchmark. Investors can compare the alpha of two or more funds investing in a similar sector or theme and pick the one with higher alpha.

    Standard Deviation

    Standard deviation measures the volatility of the portfolio. In other words, it measures how risky the fund is by measuring how the returns are deviating from the average returns. A high standard deviation of a fund shows that its returns are very volatile, hence is risky.

    Beta

    Beta is a measure of the sensitivity of a sectoral and thematic fund to stock market movements. A fund is very sensitive to market movements if the beta is more than one. A fund is less sensitive if the beta is less than one. However, the fund and market are in tandem if the beta equals one.

    Portfolio Turnover Ratio

    The portfolio turnover ratio is a measure of how many times the fund’s portfolio has changed in a year. A lower turnover ratio is considered good. It shows that the fund manager hasn’t churned the portfolio much, keeping the transaction costs and other expenses low.

    Sharpe Ratio

    Sharpe ratio measures the risk-adjusted returns of a sectoral and thematic fund. In other words, it shows whether the returns are due to a superior quality portfolio or the risk undertaken. Therefore, a higher Sharpe ratio is better.

    R-squared

    R-squared measures the effect on a fund’s performance due to market movements. It ranges between zero to 100, where 0 shows no correlation to the market, while 100 shows a high correlation.

    Cost

    Sector and thematic mutual funds, like all other funds, have certain expenses attached to them. The expense ratio includes traction costs, fund management fees, marketing and distribution costs, etc. Moreover, these funds also charge an exit load if the investment is withdrawn before one year. Hence investors investing in these funds should check the expense ratio and exit loads and how it will affect their overall return.

    Taxation

    Sectoral and thematic mutual funds are taxable like equity mutual funds and hence have short term and long-term capital gains tax. Before completion of one year from the investment date, all capital gains are called short-term capital gains and are taxable at 15%. Whereas all other gains are considered long-term capital gains and are taxable at 10% if the gains are above INR 1 lakh. Investors have to understand how these funds are taxable before investing in them.

    Explore Funds by Category

    Index FundsSmall Cap Funds
    Equity FundsDynamic Asset Allocation Funds
    Liquid FundsShort Term Funds
    Large Cap FundsRetirement Funds
    Debt FundsDiversified Funds
    Tax Saving FundsHybrid Funds
    Mid Cap FundsArbitrage Funds
    Corporate Bond FundsMoney Market Funds
    Childrens FundsGilt Funds
    Overnight FundsInternational Funds
    Ultra Short FundsBanking and PSU Funds
    Credit Risk FundsMulti Asset Allocation Funds
    Equity Savings FundsDynamic Bond Funds
    Low Duration FundsSolution Oriented Funds
    Long Duration FundsMedium Term Funds
    filter-btn
    Add Filter