India stands out as a stable oasis in today's ‘polycrisis’
Edited excerpts: Indian investors predominantly stick to a market capitalization-based investment approach; a bulk of it focussed on large, mid, or small-cap stocks. However, the concept of investing in various styles or themes hasn't gained much traction yet. Themes have demonstrated long-term growth potential in India.
Globally, investors prefer thematic and innovative investments over traditional market cap strategies. Some good examples are consumption, healthcare, and financials. Moving forward, we see growth in investing beyond market cap.
A futuristic outlook includes themes like manufacturing, which is gaining strength and aligns with India's growing economic narrative. Even today, there is a confusion between sectors and themes. Themes are often mistaken for sectors.
Sectors are subset of a theme. Themes grow over a period of time and can include various sectors. For instance, our Consumer Fund, launched in 2011, initially focused on FMCG but has since diversified considerably.
Pharma, for example, falls under the broader Healthcare theme. What began with just Banks in the 1990s now includes NBFCs, Financials, and Fintech. The key takeaway is that themes expand over time and can serve as long-term investment avenues.
Sectors can be cyclical while themes can be secular. The mutual fund industry currently boasts ₹2.92 trillion in thematic funds, signaling growing recognition of this investment approach. We're confident that India will continue to thrive as a consumption-driven economy.
The approach to investing has undergone dramatic changes. In my father's time, like many salaried individuals, he relied on pensions for his retirement. However, today, only 6% of India's workforce has pensions, while the rest are
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