Is it time to shift gears towards thematic funds?

Trends dictate many aspects of our lives. Nowhere is this more visible than in the fast-moving world of investing. Take sectoral funds. In FY25 (till February), net inflows into these funds soared more than 200%. Thematic or sectoral funds-equity schemes investing in specific sectors of the economy-received net inflows of Rs 1.46 lakh crore between April 2024 and February 2025 as against Rs 46,138 crore in FY24. What fuelled this growth? Some attribute it to government-backed initiatives such as production-linked incentive (PLI) schemes, Make in India push and initiatives towards ‘Viksit Bharat’. After all, among the most sought-after funds were those investing in public sector undertakings (PSUs) and manufacturing/defence companies.