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Financial markets

5 Cheapest Thematic Funds to Invest in 2025

Strategic Insights

— 2 min read

The past year has seen significant fluctuations in the stock market, primarily due to Foreign Institutional Investors (FIIs) selling, US tariff drama, and other global events. Amidst this volatility, mutual funds, including thematic or sectoral funds, have faced a decline in growth. Despite this, for investors looking to ride the different phases of business cycles, certain thematic funds have shown promising performance.

Key Takeaways:

  • Edelweiss Business Cycle Fund delivered a 2.43% return in the last 3 months and a strong 12.86% gain over 6 months, with a relatively low-expense ratio of 0.42%.
  • SBI Equity Minimum Variance Fund has delivered moderate short-term gains with a 3-month return of 0.59%, a 6-month return of 7.32%, and a 1-year return of -3.92%.
  • Sundaram Business Cycle Fund has shown strong medium-term growth since its launch, with a 3-month return of 2.37%, a 6-month return of 13.46%, and a 1-year return of 6.84%.
  • Nippon India Quant Fund has reflected steady medium-term growth with moderate short-term fluctuations, delivering a 3-month return of 1.00%, a 6-month return of 12.15%, and a 1-year return of 2.14%.
  • Axis India Manufacturing Fund has delivered strong medium-term growth, but a slight decline over the past year, with a 3-month return of 2.32%, a 6-month return of 16.16%, and a 1-year return of -1.67%.
  • Thematic or sectoral funds bet on specific themes or sectors and can capture the momentum of growth sectors, but also have a relatively high-risk profile due to less diversification and concentration.
  • There are risks associated with investing in thematic funds, including high risk due to high concentration and less diversification.

Statistics:

  • 2.43% return in the last 3 months
  • 12.86% gain over 6 months
  • 0.42% expense ratio
  • 3-month return of 0.59%
  • 6-month return of 7.32%
  • 1-year return of -3.92%
  • 2.37% 3-month return
  • 13.46% 6-month return
  • 6.84% 1-year return
  • 1.00% 3-month return
  • 12.15% 6-month return
  • 2.14% 1-year return
  • 2.32% 3-month return
  • 16.16% 6-month return
  • -1.67% 1-year return

Sources:

  • "Edelweiss Business Cycle Fund" by Edelweiss Mutual Fund, 2024
  • "SBI Equity Minimum Variance Fund" by SBI Mutual Fund, 2019
  • "Sundaram Business Cycle Fund" by Sundaram Mutual Fund, 2024
  • "Nippon India Quant Fund" by Nippon India Mutual Fund, 2013
  • "Axis India Manufacturing Fund" by Axis Mutual Fund, 2023
  • Value Research, for data on fund performance

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