High-risk profile: Low-cost thematic funds you can consider adding to your portfolio

Thematic funds are often confused with sectoral funds, as there is a very thin line of demarcation between the two. In the former, some specific themes proving to be favourable for the larger global and domestic economies are targeted. Some of the well-known thematic funds are infrastructural funds, MNC funds, consumption funds, etc.

Here, the point of difference is that while sectoral funds are limited to some particular sector, the thematic fund can cover a broader picture and accumulate more such sectors within a particular theme. So, while consumption is classified as a thematic fund, FMCG is a sectoral fund.

For the purpose of the analysis, we have included only funds that have a long history of over 10 years and are cheap, i.e., carry a low expense ratio.

Nippon India Quant Fund-Direct Plan: The scheme seeks to generate capital appreciation by investing in an active portfolio of stocks selected on the basis of a Quant model. In the quant model of stock selection, the stock's history is analysed. Further, what characteristics drive  trigger performance difference between stocks in a particular basket such as small-cap, sectoral etc. are also tracked.

The fund’s trailing 3-year, 5-year, and 10-year annualised returns are 23.14 per cent, 17.54 per cent, and 14.46 per cent. The expense ratio of the fund is 0.32 per cent.

The fund has a maximum allocation in equities—more than 99 per cent. The top 10 stocks in its portfolio are HDFC Bank, ICICI Bank, ITC, L&T, Reliance Industries, and TCS.

UTI Transportation and Logistics Fund-Direct Plan: The assets under management of the fund are Rs 2,348 crore, and its net asset value (NAV) as of November 21 is Rs 213.98.

The fund’s 94 per cent corpus is channellised into equities, with the rest being put into debt and cash.

The sector’s top holdings are Maruti Suzuki, M&M, Tata Motors, and Eicher Motors, among others.

The fund’s trailing 3-year, 5-year, and 10-year annualised returns are 26.02 per cent, 14.59 per cent and 19.44 per cent. 

Tata Ethical Fund: This fund aims to multiply wealth for investors by investing in equities or equity-linked securities of Shariah-compliant companies. The fund has a 10-year track record, and its assets under management are worth Rs 1,883 crore. The fund's 3-year, 5-year, and 10-year trailing returns are 21.85 per cent, 17.65 per cent, and 16.18 per cent.

The top holdings of the fund are TCS, Infosys, HUL, HCL Technologies, and Siemens.

Note: For collating the data, we have taken inputs from investment research firm Value Research. Further, please evaluate your risk profile and seek a financial advisor’s help in picking the right fund. Zee Business, through this article, is not promoting any investment ideas in these funds.