What is Thematic Investing And How It Works

Posted by Rashmi Dey on December 28th, 2020

As of now, there are over 3.7 crore Demat accounts in India, it seems like a large portion of them are inactive. Now the question arises; why? This is because most of the people in India have no time to do the planning, a bit of stock market research before investing in any stock. 

Thematic investing allows you to invest in your favourite stocks without doing a bit of research on stocks. In other words, it enables investors to invest in themes that are ready-made portfolios or baskets of stocks in the simplest way. Also, the thematic investment allows investors to customize themes as per their investments. 

Concept of Thematic Investment

We all grow up by living our dreams, in fact, our living standards, professions, and education determine our thoughts of the mind. When it comes to money, we always give preference to the stocks that resonate with our ideas and understanding. It is a platform which helps you to invest in your ideas which is completely based on your thinking process instead of doing your own research and building a portfolio from scratch.

For instance, if you think that AI, ML, blockchain technology will completely change the future of technology and has huge growth, you can invest in a theme which is specifically designed with that view. By doing this, you can save a lot of valuable time and energy instead of doing research and being burdened with the cumbersome. 

With the thematic investment, you can briefly focus on your ideas and let us focus on the stocks. 

How Thematic Investment Works:


Explore Unique Themes

There are several unique themes which are built based on innovative concepts and ideas which are shaping the world. You can select any theme based on your conviction.

Make the Decision

Thematic investments allow investors to explore multiple themes, compare it to others, benchmark it against other asset classes such as equity, debt, gold. Also, with the thematic investment, you will get to know how the themes have performed in the past and what will be its future preferences. 

Manage Weights

Here, stock brokers play a crucial role as they perfectly recommend their clients to buy equi-weightage of the theme so that the risks and returns are properly managed. However, based on risk appetite, you can easily alter the weight as they are fully customizable. You have full control to manage your asset allocation in a way that makes you most comfortable. 


As you know that the stock market heavily depends on demand and supply, economy and hence it fluctuates from time to time depending on underlying conditions, it is always good to maintain your investment updated. As you invest in a theme, asset’s performance within the same stock is being tracked on a regular basis. Rebalancing your portfolio means you can make the necessary changes through this platform after buying/selling some of the stocks to your portfolio. 

How Thematic Investment is Different From Mutual Funds

In mutual funds, fund managers generally invest the majority of money in larger companies and not necessarily in the one which has a high potential to earn positive returns. Putting huge money in larger companies prevents them from capitalising on greater opportunities as they are bound to invest in smaller amounts.

In thematic investment, themes are equi-weighted which means you will get an equivalent exposure to each stock in the portfolio regardless of the market capitalisation of each company. 


Diversify your portfolio by investing in multiple companies and invest in the most hassle freeway. For any queries, kindly contact us https://international.swastika.co.in/

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Rashmi Dey

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Rashmi Dey
Joined: November 26th, 2020
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