Thematic Funds Vs Sectoral Funds: What Are They & Which Is Better? I The Mutual Fund Show

Summary

The Mutual Fund Show on NTV Profit discusses the rapid growth of sectoral and thematic mutual funds, now the largest category in actively managed equity funds in India. Santos Joseph, founder of Germinate Investor Services, warns investors about the risks of chasing recent high returns in sectors like PSU, manufacturing, and logistics. He advises a cautious approach, suggesting no more than 20-30% of an equity portfolio in thematic funds and emphasizes the importance of diversification and a long-term investment horizon.

Takeaways

• 📈 The actively managed Equity mutual fund space is seeing rapid growth, especially in sectoral and thematic categories.
• 💹 As of July, sectoral and thematic funds hold the largest assets under management, with INR 4.21 lakh crore and significant inflows in the last three months.
• 🚀 The fastest growing categories include manufacturing, PSU, and transportation logistics, with impressive returns up to 100% in some cases.
• 📊 Recency bias is noted as a significant factor driving investments into these funds, with many investors chasing recent high returns.
• 📉 Santos Joseph advises caution, noting that while thematic funds have done well, they can also be subject to downturns and should be part of a balanced portfolio.
• 🔍 Investors are encouraged to consider the long-term sustainability and risk associated with thematic investments rather than just recent performance.
• 🌐 Diversification is key; thematic investments should be a part of a broader portfolio to mitigate risk.
• 💼 For new investors, it's suggested to start with diversified funds before moving into thematic or sector-specific funds.
• 💵 The script highlights the importance of having a prudent investment strategy, including a step-up SIP approach for long-term growth.
• 📊 The discussion also touches on the construction of portfolios, noting that some funds may hold stocks not traditionally associated with their theme.
• 📉 There's a warning against putting too much into a single sector or theme, especially for older investors or those with a shorter investment horizon.

Q & A

What is the focus of the Mutual Fund Show on NTV Profit and My?

The Mutual Fund Show on NTV Profit and My focuses on providing actionable insights on mutual fund-related topics, discussing strategies and themes in the mutual fund space.

What is the fastest growing category in actively managed Equity mutual funds?

The fastest growing category in actively managed Equity mutual funds is sectoral and thematic funds, which became the single largest category in terms of assets under management in July.

How much was the assets under management for the sectoral and thematic category in July?

The assets under management for the sectoral and thematic category in July was 4.21 lakh CR rupees.

How much inflows have come into the sectoral and thematic category in just the last 3 months?

Inflows into the sectoral and thematic category in just the last 3 months amounted to as much as 60,000 CR rupees.

What is the number of schemes available in the sectoral and thematic category?

There are as many as 174 schemes available in the sectoral and thematic category, making it the category with the most number of schemes.

What is the term used to describe the bias towards recent events influencing investment decisions?

The term used to describe the bias towards recent events influencing investment decisions is 'recency bias'.

What is the difference between sectoral and thematic funds?

Sectoral funds are more micro-focused on a specific industry, while thematic funds are broader and based on a particular theme or trend that cuts across multiple sectors.

Why are thematic funds currently favored over sectoral funds?

Thematic funds are currently favored over sectoral funds because they offer a broader range of stocks to invest in, providing more diversification and potentially better risk-adjusted returns.

What is the thumb rule regarding the percentage of one's portfolio that should be allocated to thematic and sectoral funds?

The thumb rule suggests allocating no more than 20-30% of one's Equity portfolio to thematic and sectoral funds to maintain diversification and manage risk.

What is the significance of SIP (Systematic Investment Plan) in mutual fund investment?

SIP allows investors to invest a fixed amount regularly, which helps in averaging out the cost of acquisition over time and also takes advantage of the power of compounding.

What is the advice for an investor who is considering investing a lump sum amount in a single scheme?

It is advised to exercise caution and consider a diversified approach rather than investing a lump sum in a single scheme, especially in a thematic or sectoral fund, to manage risk effectively.

Outlines

00:00

📈 Introduction to the Mutual Fund Show

The paragraph introduces the Mutual Fund Show on NTV Profit, hosted by Alex Matthew. The show aims to provide actionable insights on mutual funds. Alex invites viewers to send in their questions about mutual funds. The discussion for the day is about the fastest-growing category in actively managed equity mutual funds, which has become the largest in terms of assets under management. The category saw significant inflows in the last three months, with 174 schemes available. Alex is joined by Santos Joseph, founder of Germinate Investor Services, to discuss strategies and the popularity of sectoral and thematic funds.

05:03

🚀 Growth of Sectoral and Thematic Funds

This paragraph discusses the rapid growth of sectoral and thematic funds, with a focus on the reasons behind their popularity. Santos explains that many investors are attracted to these funds due to recent strong performance, which he terms as 'recency bias'. He notes that while these funds offer compelling long-term stories, they can be subject to market volatility. Santos advises that while it's not wrong to invest in thematic funds, it's crucial to maintain a balanced portfolio and be aware of the risks involved.

10:04

🤔 The Debate on Thematic vs. Sectoral Funds

Santos and Alex debate the merits of thematic versus sectoral funds. Santos argues that thematic funds offer a broader range of investment opportunities compared to sectoral funds, which are more narrowly focused. He suggests that thematic funds provide better diversification and are less likely to be affected by downturns in specific sectors. However, he also cautions that past performance is not indicative of future results and that investors should be prepared for market fluctuations.

15:05

🏦 Diversification and Portfolio Construction

The conversation shifts to the construction of diversified portfolios, with a focus on how investors can balance thematic investments with other types of funds. Santos discusses the importance of not overexposing a portfolio to a single theme or sector and the benefits of having a mix of different themes. He also touches on the auto-rebalance mechanism in diversified funds, which can help manage risk and capitalize on market opportunities.

20:05

📉 Cautionary Advice for Thematic Investing

In this paragraph, Santos offers cautionary advice for investors considering thematic funds. He suggests that while these funds can offer significant returns, they can also be volatile and may not perform well in certain market conditions. Santos recommends that investors should not invest more than 20-30% of their equity portfolio in thematic funds and should be prepared for the possibility of a market downturn.

💡 Viewer Questions and Expert Advice

The final paragraph involves a Q&A session where Santos answers viewer questions about mutual fund investments. Topics include strategies for Systematic Investment Plans (SIPs), the potential of Electric Vehicle (EV) funds, and advice for older investors. Santos emphasizes the importance of diversification, long-term investment horizons, and cautious investment decisions.

Keywords

💡Mutual Fund

A mutual fund is a type of investment vehicle consisting of a portfolio of stocks, bonds, or other securities, which is managed by an investment company. In the context of the video, mutual funds are the central theme, with discussions focusing on investment strategies and insights related to them. The show aims to provide actionable insights on mutual fund investments.

💡Actively Managed Equity

Actively managed equity funds are a category of mutual funds where portfolio managers make active buying and selling decisions to outperform the market. The script mentions these funds in the context of one of the fastest-growing categories in the mutual fund space, highlighting their significance in the current investment climate.

💡Assets Under Management (AUM)

Assets under management refers to the total market value of investments that a fund manager manages on behalf of investors. The script mentions that the sectoral and thematic category became the single largest in terms of AUM, indicating the substantial growth and interest in these types of funds.

💡Sectoral and Thematic Funds

Sectoral and thematic funds are specialized mutual funds that invest in specific industry sectors or themes, respectively. The video discusses the rapid growth of these funds and the strategy for investing in them, cautioning viewers about potential risks and the importance of diversification.

💡Recency Bias

Recency bias is a psychological phenomenon where recent events or experiences have a disproportionate effect on one's judgment. In the script, Santos Joseph points out that investors might be attracted to sectoral and thematic funds due to recency bias, chasing recent high returns without considering long-term sustainability.

💡NFO (New Fund Offer)

NFO refers to a new fund offer, which is a mutual fund that has recently been launched for investors to subscribe to. The script mentions a high number of NFOs in the thematic space, indicating a surge in new investment opportunities within this category.

💡Diversification

Diversification is an investment strategy that involves spreading investments across various financial instruments, industries, or other categories to reduce risk. The video script emphasizes the importance of diversification in mutual fund investments to protect against downturns in specific sectors or themes.

💡Risk Measurement

Risk measurement involves assessing the potential risks associated with an investment. The script discusses the need for investors to consider risk measurement when investing in thematic and sectoral funds, as these funds can be more volatile compared to diversified funds.

💡SIP (Systematic Investment Plan)

A SIP is an investment plan that allows investors to invest a fixed amount at regular intervals, such as monthly. The video script highlights the benefits of SIP investments, including the power of compounding and the ease of disciplined investing over the long term.

💡Step-Up

A step-up in the context of SIP refers to increasing the amount invested at regular intervals to account for inflation or to increase exposure over time. The script provides an example of a viewer who plans to step up his SIP by 10% each year, which is praised as a smart long-term investment strategy.

💡Portfolio Rebalancing

Portfolio rebalancing is the process of adjusting the weightings of different assets in a portfolio to maintain the desired level of risk. The script mentions that diversified funds have an auto-rebalance mechanism managed by portfolio managers, which can be beneficial for investors compared to managing thematic funds individually.

Highlights

The mutual fund show on NTV Profit discusses actionable insights on mutual funds.

Sectoral and thematic categories are the fastest growing in actively managed Equity mutual funds.

In July, sectoral and thematic funds had assets under management of 4.21 lakh CR rupees.

60,000 CR rupees in inflows occurred in the last 3 months alone.

There are 174 schemes available in the sectoral and thematic category.

Investors are attracted to sectoral funds due to recent high returns.

Recency bias is causing investors to chase recent returns rather than themes.

PSU, defense, and transportation logistics are currently dominant themes.

Most thematic funds have doubled the returns of the Nifty Benchmark over the last year.

Investors are cautioned about the risks of investing heavily in thematic and sectoral funds.

Savvy investors should maintain a balanced portfolio when investing in thematic funds.

Investors are advised not to exceed a 20-30% allocation to thematic and sectoral funds.

Thematic funds offer a broader range of stocks compared to sectoral funds.

A diversified portfolio can include multiple themes for diversification.

Investors should be cautious of the construction of thematic funds and their adherence to labels.

Fund managers have a 10-20% leeway to deviate from the investment mandate.

HDFC Bank and Reliance Industries are examples of stocks that may not fit the infrastructure theme.

Investors are encouraged to have a long-term view and patience with thematic investments.

Viewer questions are addressed regarding SIP investments and thematic funds.

A viewer's investment strategy of SIP in three mutual fund schemes is praised.

Another viewer's investment in narrow schemes is questioned, suggesting a more diversified approach.

A 60-year-old investor is advised against putting a large lump sum into a single thematic fund.

A 47-year-old viewer is advised to consider a longer investment horizon for SIPs.

Transcripts

[Music]

hi thanks so much for joining in you're

watching the mutual fund show on NTV

profit and my name is Alex Matthew like

the name suggests this show gets you

actionable Insight on everything mutual

fund related and to that end we've got

that number on the screen if you've got

specific questions about mutual funds

then I'd invite you to send them to us

on that number and I will take them up

at some point either today or in the

coming days on this very show now often

we talk about a particular strategy or a

theme that you need to know about in the

mutual fund space and that's exactly

what we're going to talk about today in

fact we're going to talk about one of

the fastest growing categories in the

actively managed Equity mutual fund

space it is in fact a category that has

become the single largest in terms of

assets under management in the month of

July that's based on the latest data it

had assets under management of 4.21 lakh

CR rupees and a bulk of that as much as

60,000 CR rupees in inflows have come in

just the last 3 months so the growth has

been absolutely frenetic which one it's

a sectoral and thematic uh category and

there are as many as

174 schemes in that category by far no

where the most number of schemes uh

available in any uh Equity category or

any other category to say the very least

to talk about what your approach should

be and why people are so enthused by the

options available here I'm joined by

Santos Joseph who's a founder of

germinate investor services in studio

Santos thanks so much for taking the

time glad to be here thanks so much for

coming by um but let's talk about this

I'm sure that your uh clients are also

asking you about several of these

schemes hey this new nfo is out and the

number of nfos we've seen 40 plus in the

past few months itself well quite

frankly it's a tough question to duck

because there is so many nfos and

there's some nice marketing material

there's some nice adoral going on about

investing in a sectoral fund like a PSU

which is done so well or a

transportation Logistics how how it's

the moment of time for us to be in the

manufacturing space now all these sounds

so good sounds so compelling but the

data there is talking a different number

that most of us are actually chasing

returns than just the theme because the

two three dominant themes that you look

right now in the sectoral or the

Thematic space how we would like to call

it is it begins with let's say the

manufacturing team at some level you

talk about the the defense stroke PSU

team and you know in some cases you also

talk about the transportation logistic

themes now for the normal investor all

these sound like a promising long-term

story but when you dig a little deeper

and you wonder why is this that

investors so attracted to it you almost

recognize that there's a recency bias to

it now what is a recency bias that

you're so enamored by the recent turn of

events that you feel this is the way

going forward this is the story with

psus this is the story with

manufacturing and this is the story with

Transportation Logistics now when I

looked at the numbers there's a reason

why they like it so much you've got the

Nifty at the headline Benchmark giving

you about 25 wat per return last one

year yeah but most thematics have more

than doubled that outcome for example

when you look at the PSU fund on the

last one year basis uh the best in the

categories delivered almost 100% return

why would you want that therefore you

see the why would you not want that why

would you not want that exactly so when

you look at that and you look at the

flows is just you know coinciding that

the flows are actually chasing the

returns and therefore the thematics are

in favor right now but okay before we

get into some of these themes and what

your opinion is on the

overall are you surprised at all that we

see that thematic and sectoral is now

the single largest category in the

actively managed Equity space no I'm not

surprised because if you notice just

exactly a year ago we were talking about

the mid and the small caps and you

notice that in most mutual fund houses

the small and the midcap category became

the dominant inflow sector and also at

that particular point of time it was

their past onee return that dictated

those inflows in fact you had come to a

point where for some AMCs their mid and

small cap it become larger than the

flexi cap and multicap fund and we we'

spoken about it earlier in the show

right now the theme is for the thematics

where people are buying into the story

and believing that these are long-term

sustainable ideas and they are just

pumping in money without taking into

account that the longetivity or the time

horizon or maybe even the risk that one

entails by investing in such kind of

themes now if you're a Savvy investor

getting exposure to this kind of theme

while keeping in mind that your overall

portfolio is not too compromised there's

nothing wrong with it but for new

investors directly jumping into thematic

and sectoral there is caution to be okay

let me let me so let me say that I agree

with a large part of what you're saying

but let me play Devil's Advocate okay

okay for the purposes of this

conversation you pointed out that there

are several of these themes have done

incredibly well we're talking about 100

plus even the defense fund has done HDFC

defense fund HDFC defense not HDFC

defense sorry defense Index Fund uh and

that's available in the market has done

130% defend all 80% right so so when all

of this is done so incredibly well why

are we saying that it's not a good idea

I'm not saying it's not a good idea I'm

saying there is a space for that into

the portfolio for example if there's a

new investor watching our show and they

hear our conversation and say wow

thematics are done well and there's a

new nfo or there's a existing fund that

is completed one or one and half you let

me put my money over there against a

multicap fund now in a multicap and a

flexi cap it's not that we don't have

defense we don't have thematics we don't

have PSU but there's a right measure in

it here you getting 100% exposure of

that one theme or the one sector now

when there's a downturn or even there's

a consolidation or even there's a cool

off the investor then will not want to

continue to stay because what can go up

also can come down canidate ween yes

we've not seen that last four years

specifically the markets are literally

on a oneway street any small correction

whe the 5 or 10% has been bought into

and the markets have rared back even

faster than the way it got corrected so

therefore the reason we are discussing

this is we want the investor to also be

aware that when you invest in a multicap

and a flexi cap you're in for the long

all you don't have to worry about the

intermittent volatility or the ups and

downs of the Thematic Cycles we've seen

this Cycles before Alex and you saw in

2007 and 8 and even before that 2006

infra capital goods uh they thought

there was no end to the world and they

kept on just buying uh and those funds

were swelling and there was so much of

inflows and then came a multi-year lull

for the sector now even infra is doing

very well right now after almost 8 or 10

year period of lull performance so you

do not want to be caught with a consolid

consolidation phase where you'll see no

returns for years to come but you should

also be careful to say that I'd like

this themes let it be a meaningful and

the right part of my portfolio Okay so

there is another argument that has been

made and even on this program it has

been made where if you are investing in

that thematic and sectoral category you

should prefer thematic rather than

sectoral because it is broader because

the pool of stocks that you the fund

manager has available to them is larger

is that a fair argument to make it is

relatively Fair argument okay for

example when you go into sectoral you

are being micro focused when you go to

thematic it's definitely more

broad-based than the sectoral idea but

not as much as the Diversified idea now

you're in the midpoint so you're

slightly better off than being sectoral

now when you look at the actual number

of stocks in the universe between

sectoral and thematic that's where the

difference comes for example a sectoral

idea would have maybe 30 40 50 stocks at

best yeah when you come to the take for

example let's take the transportation

Logistics from the manufacturers to the

OEM to the lenders to the retailers you

take the whole universe you'll have 150

to 200 stocks or maybe slightly more

than that depending on how lower you

want to go in the market cap size now a

universe of 200 stocks is way better

than a universe of 50 stocks because you

got the whole play better for you

likewise is the manufacturing

opportunity or the defensive uh space or

even the PSU space consumption or

consumption space now what we seeing is

that if you're someone who understands

the risk and you want that front seat

front row action then thematics are

better right and so therefore if you

notice that that's why new nfos are

coming in the Thematic space than the

sectoral space and the investor activity

there should also be measured is it

possible to have a diversified portfolio

with mult multiple themes so for example

okay you have one fund maybe a flexi cap

or maybe a combination of flexi cap

multicap or what what have you or midcap

small cap and large cap okay you've done

your research you've picked these three

and you've picked three uh schemes you

want to be across Market Cap

Diversified alternatively if you pick

four themes that uh at any given point

of time you'll see one or two

outperforming and the other two may be

not doing as much can you have that same

amount of diversification well that is

what many uh investors today are rooting

for what they're trying to yes what

they're trying to do is they're trying

to take the top four hot teams I'm not

saying sectors no that's not what I'm

asking no they want to build portfolio

out of the top four five team but that's

not what I'm asking what I'm asking is

okay let me let me spell it out further

so you're talking about Banking and

Financial Services you're talking about

it you're talking about consumption and

you're talking about manufacturing right

so at any given point of time based on

where the economy is one would assume

that even if it is not doing well

because say the US is not doing well

well you have Manufacturing in India

that is doing well construction is doing

well you have banking that is doing well

at any point of time and maybe a farmer

or healthare fund not not farmer but

Healthcare at any given point of time

one out of these four schemes or two out

these four themes will be doing well yes

so here's the example that you we just

extrapolate that if there are five tees

that you invested and you believe that

at least three will do well and two may

be uh mediocre the in will not look at

the two as good to have in the portfolio

he'll say let me remove the two and

double down on the three that's the

catch now what I was trying to explain

is if you are having five tees you're

way better off than one sector or one

theme but the point is do you have the

Prudence to say even if one or two teams

don't perform intermittently or in the

short term I will not plug it out

because then you're giving away

diversification then you're giving away

the risk measurement that one needs to

pay heed to you should be patient and

let all those five themes play out

because that's exactly what a

diversified fund is trying to do because

the other advantage that you have in a

diversified fund versus this four five

thematic ideas is that there is an auto

balance or rebalance mechanism that your

portfolio manager is doing on your

behalf because he's also privy to the

same amount of information that you have

so therefore he tends to increase the

exposure or cut the exposure in line

with valuation and in line with the

market sentiment whereas you as an

investor will either plug in fund or

just pull out the whole funds from your

portfolio and then try to double down on

the ones that are doing well and when

the market turns you may have a rough

Landing I want to ask about the

construction of the portfolios of some

of these teams and I've just taken an

example here um not necessarily to poke

at this one scheme but as a a valid

example I'm looking at the Quant

infrastructure fund and I'm looking at

the top two Holdings it is HDFC bank

which is 9 and 1 half% of of the assets

under management and Reliance Industries

which is n close to 9 and 1 half% my

question is that these are not

necessarily stocks that are known as

infrastructure plays Reliance Industries

is a diversified play you have oil and

gas Petr chemicals you have uh retail

you have Geo uh Telecom HDFC bank has a

very large retail book now with the

combination of HDFC has a very large

mortgage book it's not infrastructure

per se so is there a danger and do you

see this across the board it's not just

Quant that I'm picking up are they true

to label well the the provision for a

fund manager from the scheme objective

deviation gives you that 10 to 20%

leeway to go outside the investment

mandate only to that extent so therefore

you'll notice that some of the top

Holdings they there which will not

essentially meet the name or the scheme

objective of the uh fund so therefore

sometimes you'll have to Discount that

and give it to the fund manager that

he's trying to do something better for

the larger portfolio by adding some what

is the rule though the rule is about 20%

there is a leeway or complete discretion

of the fund manager that what he'd like

to do in terms of the scheme objective

versus the stocks that you buy into the

portfolio and there are no other rules

in terms of the individual uh stocks

that you're holding because for example

the HDFC defense fund has what 40 plus%

in the top three Holdings see there are

one the regulatory norms and then

there's also the Norms that their own

internal policies of investment policies

will be typically they don't allow you

to buy more than 10% of any stock in the

portfolio and that's a good measure but

internally there could be an 8% or a 5%

because you also have to factor in Mark

to Market appreciation of the particular

stock in the portfolio so that 10% is an

individual security level but at overall

level even in a small Cap Fund sometimes

you'll notice that when you pick up a

typical small cap uh fund they'll be the

largest of the large cap being the top

of the second second top holding is

because it it's basically that small

percentage where they can take the

deviation and because it's a large cap

stock that pops up right in the top five

or top 10 Holdings now coming to HDFC

Bank most people say most people will

say I buy HDFC bank because if

infrastructure has to do well there has

to be a financier or someone who can

create the leverage for the person

creating infrastructure or for the

person wanting to consume infrastructure

you need leverage at some particular

point in time so they say we are playing

the funding route to infrastructure

because it begins with funding and then

there's an execution um on the roads so

therefore that's the difference that why

people play uh Financial Services uh for

the infrastructure play okay closing

comments on seol and thematic uh what do

you need to bear in mind if you ey the

market for these schemes and uh I know

that thumb rules people often say what

20% of your portfolio at the very most

of your Equity portfolio do you ascribe

to that can you go over that in what

situations can you go over with that see

there's a reason why the thumb rules are

at 20 or 30% of the portfolio is because

most often than not markets actually

change faster than you can imagine in

fact the last two to three years is a

good example of how we saw the

Renaissance of mid and small cap we saw

the emergence of some of these thematics

that sometimes you wonder what how did

you miss them like how did you miss

manufacturing how did you miss PSU and

PSU was there at this valuation for

years and nobody bought it now you're

getting into a territory where we some

some of us fear are we being overbought

in the space of manufacturing and PSU

because they're all not new in fact if

you notice some of the names that they'

have been longer than you and I have

been in the industry now there's caution

to be advised and therefore the way you

exercise caution is the way you control

your exposure to these ideas of course

when they going is good they give you

outsized returns but you also want to

protect a downside because investing is

so much so not only about making money

it's about also protecting your law

that's why we talk so much about

diversification right sizing your

portfolio so when you have have a 20 to

30% you got a meaningful participation

when the returns are good you also have

a protection when the returns are going

down or this consolidation all the

concept of diversification and having

thumb rules is so that the investor can

stay longer remember the guy standing

last is the winner absolutely on that

note we have to slip into a very quick

break we've got uh viewer questions some

that you have sent us of course to take

after this very quick break so do stay

tuned

[Music]

hi welcome back you're watching the

mutual fund show and I must admit that

sometimes reading the questions that you

sent in uh give me a lot of Happiness

particularly because a lot of times they

are very well thought out and you've

already more or less got the answer

right you're just looking for that

validation which hopefully Santos will

be able to provide you with Rahul yadav

has got the first question today and

he's investing 5,000 rupees per month

each in three mutual fund schemes it's

parag parik flexi Cap Fund SBI midcap

fund and AIS small Cap Fund he's looking

to do this for 25 years and with a 10%

Step Up you have hid this out of the

park already Rahul and this is without

even going to the expert I know for a

fact

please tell me I'm right no he's right

on all counts I'm glad number one he's

right for starting an sip he's right

with the 10% step up every year and

third also the choice of funds I'm glad

it's not a thematic fund but a nice

flexi Cap Fund and a good basket of them

now where this gets interesting is to

have the forethought to do an Sip and

pre-commit to a 10% step up every year

do you know by the time he ends his sip

the the Quantum of money that he'll be

saving is almost 3x 4X of what he's

starting with and all this is going to

happen with minimal effort year on year

thanks to the automated method of doing

a 10% step off and believe me when you

take an sip extrapolation number at this

number to how much he'll earn with a

step up that numbers also compound for

him so I think uh the answer is do you

have that do you have that have have you

at all worked out so even if you take a

conservative estimate did you by any

chance do that so let's do a simple

example if you do 5,000 a month right

you doing 60,000 a year and in a 10

period you do 6 lakh in a 20- year

period That's 12 lakhs now he's doing

25,000 so that's 12 into 6 almost doing

60 lakhs he's doing 15,000 15,000 so

basically that is uh uh 12 into 3 36

lakh yeah now the 36 lakh is at even a

10 12% CHR over a 20 year period could

easily be some 80 90 lakhs right and the

last 20 year numbers are superb but

let's take only 10 to 12% now with a

step up the amount of money that he

saves that that 36 lakh will become

almost post 70 75 lakhs now you take

that and compound it because of the

principal amount yeah that's just a

principal amount that he will maybe be

at 1.4 1.5 crores easily at the very

least very easily and if the market

supports him for this kind of uh a good

investor with the the right approach to

sip investing there'll be even more

upside absolutely I I would say that he

would be uh in you know hopefully you

will remember us Rahul in in 15 years

time when you are rolling in money aay

has got the next question he's currently

invested in Access focused fund as well

as the icic presedential India

opportunities fund SBI technology and

HDFC banking fund the total sip value is

52,000 rupees per month all of them very

narrow schemes okay so he's asking okay

the question is not whether he should

continue to do this but maybe you can

weigh in on that but he's looking to

invest in the EV scheme uh or E theme as

well could you do you have a suggestion

so it looks like one is going for the

the Thematic route that we just just

spoke about now we all know that the EV

is the the hot thing and if if not

already the hot thing the next hot thing

that we are all looking forward to now

first of all in India the direct EV

theme uh plays very limited and very

small and uh therefore uh the the need

to you know be in it or the foro is very

high to be in the E team you want to be

the first guy investing in that story my

advice is that uh it's better off that

you are in Diversified funds eventually

when more and more Eevee names and eveve

listings happen they will find its way

into the portfolio and you will do

better for yourself considering that

you're a long-term sip player the funds

that you have in itself will find a way

to incorporate those kind of EV themes

now having said that just recently we

did have a new age uh mutual fund

company grow launch its own EV ETF and

fund of fund so while there is an

opportunity out there dedicated for the

Eevee tee but I would think from a

long-term perspective it's better off to

be in a diversified Equity Fund where

Eevee will be a part of the portfolio

then just take a shot at the EV space in

itself and hopefully what we spoke about

at the start or through the conversation

so far AE will benefit you when you're

thinking of the allocation that you have

towards thematic funds kid has got the

next question he wants he's 60 years old

he wants to invest 2 CR rupees in a

single scheme for a period of 5 years

and that is the Tata tourism Index Fund

wow well no doubt the last 2 to three

years the the the tourism uh you know

bunch of stocks that done phenomenally

well you talk about the hotels you talk

about the airlines uh there's reason to

believe that uh the tourism opportunity

in India is farly uh you know largely

untapped in fact uh most of our cities

we are not yet geared up for tourism as

a concept now if the government policy

or even the public private uh uh you

know some activity to W tourism uh you

know kicks in there's huge scope for

that growth but having said that you

know W for the but yeah those narratives

aside it's just too much at that age to

put this kind of lumpsum into a tourism

fund I think a good multicap or a flexi

Cap Fund maybe you can sort These funds

based on the sectors where they have

exposure to where you feel that tourism

is well represented it could be from

hotels to uh those uh travel companies

to even airline companies or even to

some extent ticketing companies if

they're all Incorporated I think you

should do well please remember that the

the Boom at the ground level and the

Boom at the stock price level sometimes

are disconnected of course there is an

exuberance when the ground level

activity is good that even the stocks

actually tend to flare up quite a bit

but from an investing perspective

exercise prudence and ensure that your

money also is safe while you also

participate in the boom now this time it

could be tourism tomorrow could be some

other story it's nice to think forward

looking but also be cautious while

investing kid I hope that answers your

question avoid is the advice uh the last

one we have just a minute 47-year-old

Vin is asking about an sip in the

following funds he's got 3 to 5 years

he's looking to invest 20,000 rupees per

month nepon India growth fund PGI midcap

opportunities fund and HDFC infra fund

again we see one or two thematics

present over there so the good thing is

that you have a mix of both thematic and

diversifi I would suggest you go more

into diversifi keep maybe one thematic

in place but I think the good thing is

you're considering sip I'm I'm I'm

guessing you're starting now at 47 it's

better to be more Diversified than

thematic right now and also you're

seeing 2 to three years if you just

broaden the Horizon you'll do well for

yourself it's a great way to make money

3 to 5 years may be a little short right

you think of 5 years plus if you even in

a diversified fund it may not be the

best time to consider an sip a little

longer Horizon always gives you better

results Santos always a pleasure having

you on the show thank you so much for

coming by and viewers that brings to the

end of this edition of the mutual fund

show it's been an absolute pleasure

bringing it to you don't forget that

number that just flashed on your screen

that's where you send the questions to

us and we'll take it in the days to come

do stay tuned this is NDTV profit

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