Thematic Funds Vs Sectoral Funds: What Are They & Which Is Better? I The Mutual Fund Show
Summary
TLDRThe 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
- ๐ The actively managed Equity mutual fund space is seeing rapid growth, especially in sectoral and thematic categories.
- ๐น 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.
- ๐ The fastest growing categories include manufacturing, PSU, and transportation logistics, with impressive returns up to 100% in some cases.
- ๐ Recency bias is noted as a significant factor driving investments into these funds, with many investors chasing recent high returns.
- ๐ 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.
- ๐ Investors are encouraged to consider the long-term sustainability and risk associated with thematic investments rather than just recent performance.
- ๐ Diversification is key; thematic investments should be a part of a broader portfolio to mitigate risk.
- ๐ผ For new investors, it's suggested to start with diversified funds before moving into thematic or sector-specific funds.
- ๐ต The script highlights the importance of having a prudent investment strategy, including a step-up SIP approach for long-term growth.
- ๐ The discussion also touches on the construction of portfolios, noting that some funds may hold stocks not traditionally associated with their theme.
- ๐ 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
๐ 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.
๐ 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.
๐ค 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.
๐ฆ 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.
๐ 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.
๐ก 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.
Mindmap
Keywords
๐กMutual Fund
๐กActively Managed Equity
๐กAssets Under Management (AUM)
๐กSectoral and Thematic Funds
๐กRecency Bias
๐กNFO (New Fund Offer)
๐กDiversification
๐กRisk Measurement
๐กSIP (Systematic Investment Plan)
๐กStep-Up
๐กPortfolio Rebalancing
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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