Thematic Funds of Funds: Trend-Focused Investing

In today’s dynamic investment landscape, thematic funds of funds have become a popular choice for investors who want to balance diversification with targeted exposure to specific market trends.

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These funds let you invest in promising themes or ideas—like technology, renewable energy, or consumption-driven growth—while spreading your risk across multiple underlying mutual fund schemes. Essentially, they offer a smart way to explore new opportunities without putting all your eggs in one basket.

What are Thematic Funds of Funds?

A thematic fund of funds is a mutual fund that invests in other mutual fund schemes that are aligned with a specific theme. Unlike sectoral funds that focus on a single industry, thematic funds concentrate on a broader investment idea or trend, such as digital transformation, renewable energy, emerging markets, or consumption-driven growth. By investing in multiple underlying funds, a thematic fund of funds offers both theme-based exposure and risk diversification.

Key Features

1. Diversification Across Schemes: Instead of investing directly in stocks or bonds, these funds allocate capital across multiple mutual fund schemes, reducing concentration risk