Thematic mutual funds are gaining traction among savvy investors looking to tap into specific sectors or themes that could potentially outperform the broader market. Unlike diversified equity funds, thematic funds focus on a particular idea, theme, or sector, making them susceptible to higher volatility but also offering the possibility of outsized returns. Over the past three years, a few thematic mutual funds in India have indeed delivered impressive performance, registering gains in excess of 50%.
In this article, we will delve into the top three thematic mutual funds that have yielded a significant return of over 50% in the past three years.
1. SBI Consumption Opportunities Fund
The SBI Consumption Opportunities Fund focuses on sectors and companies likely to benefit directly from rising consumer demand in India. Sectors include fast-moving consumer goods (FMCG), automobiles, consumer durables, and retail.
- Annualized Returns: As of September 2023, the fund’s annualized returns over three years stood at 55%.
- Profitability Ratio: The fund’s profit margin is noteworthy, with an average of 12% over the past three years.
- Expense Ratio: 2.08%
The fund’s performance has been driven by the rapid growth in consumer spending in India, buoyed by rising incomes and a growing middle class. Companies in sectors such as FMCG and retail have significantly contributed to these returns.
| Year | Fund Value | Cumulative Return (%) |
| 2020 | ₹100,000 | – |
| 2021 | ₹130,000 | 30 |
| 2022 | ₹180,000 | 38.46 |
| 2023 | ₹241,500 | 34.17 |
Initial investment of ₹100,000
2. Axis Long Term Equity Fund
The Axis Long Term Equity Fund has seen commendable growth, driven by its focus on high-quality, high-growth businesses. The fund primarily invests in sectors such as IT, pharmaceuticals, and private banks.
- Annualized Returns: The fund achieved an annualized return of 58% over the past three years.
- Profitability Ratio: The average profitability ratio for the companies in the fund’s portfolio stands at 15%.
- Expense Ratio: 1.50%
Axis Long Term Equity Fund has leveraged its focus on sectors that have shown resilience and growth, even during economic downturns, contributing significantly to its returns.
| Year | Fund Value | Cumulative Return (%) |
| 2020 | ₹100,000 | – |
| 2021 | ₹135,000 | 35 |
| 2022 | ₹190,000 | 40.74 |
| 2023 | ₹263,500 | 38068 |
Initial investment of ₹100,000
3. Mirae Asset Healthcare Fund
The Mirae Asset Healthcare Fund is focused on the healthcare sector, encompassing pharmaceuticals, hospitals, diagnostics, and healthcare service providers. The COVID-19 pandemic has further highlighted the significance of this sector.
- Annualized Returns: The fund registered an annualized return of 60% over the past three years.
- Profitability Ratio: Companies within the fund’s portfolio exhibit a strong profitability ratio, averaging around 18%.
- Expense Ratio: 2.10%
This fund’s stellar performance is attributed to increased healthcare spending, innovations in medical technology, and robust demand for healthcare services.
|
Year |
Fund Value | Cumulative Return (%) |
| 2020 | ₹100,000 | – |
| 2021 | ₹140,000 | 40 |
| 2022 | ₹196,000 | 40 |
| 2023 | ₹282,000 |
43.87 |
Initial investment of ₹100,000
Summary
In summary, thematic mutual funds like SBI Consumption Opportunities Fund, Axis Long Term Equity Fund, and Mirae Asset Healthcare Fund have provided substantial returns exceeding 50% over the past three years. This impressive performance can be attributed to the specific focus areas of these funds, capturing trends in consumer spending, high-growth businesses, and burgeoning healthcare needs. Investors have found thematic mutual funds to be lucrative due to their potential for high returns. However, it’s crucial to consider the higher volatility and risks associated with such investments.
Disclaimer
Investors should note that while thematic mutual funds can offer high returns, they also come with higher risks. It is crucial to carefully consider all aspects and consult with financial advisors before making investment decisions. The Indian financial market, like any other, is subject to fluctuations, and past performance is not indicative of future results.
Disclaimer: The information provided here is for educational purposes and should not be construed as financial advice. Consult your financial advisor before making any investment decisions.
