Emergence of thematic funds sign of a growing market, say MF CIOs

Roshi Jain- HDFC AM

Mutual Fund CIOs who spoke at the third edition of the Moneycontrol Mutual Fund Summit, which was held in Mumbai on August 21, noted that there has been a shift in the investment landscape with newer products emerging.

Roshi Jain, senior fund manager at HDFC Asset Management described the evolution of thematic funds as part of a larger market trend, saying, "This is a natural process of market evolution. This is happening not only in India but also globally. For a growing number of investors, you will have to find new products and solutions."

She added that as the market has grown, it has created significant niches, which mutual fund houses have been trying to address.

Sanjay Chawla, CIO - Equity, Baroda BNP Paribas Mutual Fund also said that there are new themes emerging for investors, but added that one needs to question whether these themes are enduring or cyclical before they take a call on investing in the category.

Dinesh Balachandran, Head of Equity, SBI Mutual Fund added that while taking decisions on launching new NFOs, conviction on the theme is the most important.

Ashish Gupta, CIO, AXIS Mutual Fund also added that for them at Axis, there is a need for themes to be broad-based. "They should be broad-based enough for us to actively manage it. It has to provide opportunities to investors through a multiple set of companies who do not have congruent cycles," he said.

Speaking on thematic funds, Jain added, “As the Indian economy has grown, and as the markets have evolved, it has created a significant scale in niches. Thematic products do not have to be mass products; they can be a niche product for select investors.”