8.30Thematic funds
1What is it?
Thematic funds invest around a theme across sectors, like manufacturing, consumption, ESG or infrastructure.
2Why does it exist?
Broader than one sector, but still concentrated; themes go in and out of fashion.
3Diagram
| Invests in | Suits | Risk | Suggested horizon |
|---|---|---|---|
| Theme-based (80%+) | Small satellite allocation | High–very high | 5+ years |
4Quick revision
- Thematic funds invest around a theme across sectors, like manufacturing, consumption, ESG or infrastructure.
- Risk: High–very high.
- Horizon: 5+ years.
5Knowledge check
Q1. Thematic vs sectoral?Show answer
Thematic spans several related sectors around a theme.
Q2. Risk of new thematic launches?Show answer
Often launched near the peak of a theme’s popularity.
Q3. Good as core holding?Show answer
Generally not.
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