Mint reported that sectoral/thematic mutual funds delivered mixed outcomes in 2025, and experts quoted in the report urged extra caution heading into 2026.
One key data point stands out: AMFI’s Monthly Report for December 2025 (as on Dec 31, 2025) shows the combined Sectoral/Thematic Funds category had 238 schemes with AUM of ₹5,37,666.60 crore (about ₹5.38 lakh crore).
What Are Thematic Funds — and How Are They Different?
Thematic funds invest around a broader theme (like infrastructure, services, PSUs or MNCs) instead of sticking to a single sector.
AMFI’s Knowledge Centre note on scheme categorisation says thematic funds are more diversified than sectoral funds, and therefore lower-risk than sectoral funds (in that specific comparison).
But that does not make them “low risk” overall. Under SEBI’s scheme categorisation structure (shown in AMFI’s SEBI-category table), Sectoral/Thematic Funds have “at least 80%” investment in stocks of a particular sector/theme—so they can remain more concentrated than diversified equity funds.
How Big Is the Sectoral + Thematic Bucket?
As per AMFI’s Monthly Report for December 2025 (as on Dec 31, 2025):
- Schemes: 238
- AUM: ₹5,37,666.60 crore (≈ ₹5.38 lakh crore)
(Mint rounded the same AMFI dataset to about ₹5.37 lakh crore in its coverage.)
What Returns Did Investors See in 2025?
Mint’s report (published Jan 13, 2026) showed mixed one-year returns across selected sectoral/thematic funds—some strong, many modest, and at least one negative.
Mint did not specify Direct vs Regular in the table excerpt shown, and “1-year return” depends on the as-on date—so publish these strictly as “as per Mint’s report/table”, not as a universal performance list.
- In Mint’s story text, examples cited included: ABSL Banking & Financial Services Fund (20.78%), Axis India Manufacturing Fund (5.35%), and DSP Banking & Financial Services Fund (24.54%).
- In Mint’s separate table excerpt, funds listed included: ABSL Banking & Financial Services (20.78%), Axis India Manufacturing (5.35%), HSBC India Export Opportunities (1.19%), and Invesco India ESG Integration Strategy (-2.88%).
Experts’ View for 2026 — “Satellite, Not Core”
Mint quoted experts arguing it’s not fair to label all thematic funds as failures because different themes move through different cycles and can diverge sharply from the broader market.
A key takeaway from the same coverage: thematic funds may suit investors who track cycles and can handle volatility, but for many retail investors they’re better treated as a smaller add-on (“satellite”) rather than the portfolio core—especially if not actively monitored.
Key Highlights
- AMFI (Dec 2025, as on Dec 31): Sectoral/Thematic Funds at 238 schemes and ~₹5.38 lakh crore AUM.
- Risk framing: thematic can be broader than sectoral (AMFI), but 80%+ theme/sector concentration can still keep risk higher than diversified equity.
- Mint’s expert takeaway: treat thematic exposure as “satellite, not core” and monitor it.
Local Impact: Jammu & Kashmir
For investors in Jammu & Kashmir, theme-based funds often trend during “hot sector” phases online. The practical point is to remember these funds are cycle-linked, and outcomes can change sharply when the theme cools off—so they typically need clearer risk labelling and closer tracking than broad-market diversified funds.
Conclusion
Thematic funds can deliver strong performance when a theme is in favour—but the same concentration can hurt when the cycle turns.
With the combined sectoral/thematic bucket at about ₹5.38 lakh crore AUM as of Dec 31, 2025, the consistent message from Mint’s expert quotes for 2026 is to treat theme exposure as targeted and higher-risk, not a default core holding.
FAQs
A: AMFI says thematic funds are typically more diversified than sectoral funds (so lower risk than sectoral). But Sectoral/Thematic funds can still be concentrated because they carry an 80%+ theme/sector requirement—so they can be higher-risk than diversified equity funds.
A: AMFI’s Monthly Report for December 2025 (as on Dec 31, 2025) shows 238 schemes with AUM of ₹5,37,666.60 crore (≈ ₹5.38 lakh crore).
Disclaimer (Business & Finance): This report is for information only and does not constitute investment advice. Mutual fund investments are subject to market risks—read all scheme-related documents carefully.
