Where Themes Truly Make Money And Where Not

Use themes to meet goals, diversify with SIPs, rebalance on valuations, and ignore market noise.

- Sajal Roy

Thematic investing has emerged as a distinctive way for investors to align their portfolios with big-picture ideas rather than focusing solely on individual sectors or stocks. At its core, a theme represents a blend of related industries or businesses tied together by a common opportunity or trend. Unlike traditional sector investing, thematic strategies allow investors to capture cross-industry movements, such as digitalisation, renewable energy, or healthcare innovation, that are reshaping economies.

One of the most compelling reasons behind its popularity is the ability to ride structural shifts. Consider how the technology wave transformed markets during the late 1990s. The Nifty IT Index delivered extraordinary returns of nearly 740% between February 1999 and February 2000. However, once the dotcom bubble burst, it corrected sharply, losing around 65% between March 2000 and March 2001.

Navigating the Complexities