5 Best Thematic Mutual Funds in 2025 for Long-Term Wealth

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Did you know by the end of the financial year 2024, the total assets under management (AUM) for thematic Equity Mutual Funds in India is worth Rs.4.61 lakh crore?

Yes, it is a huge rise for thematic funds skyrocketing up to a 70% increase from January 2024, when it stood at an AUM of Rs.2.71 lakh crore only.

Now, following this consistent growth, are you ready to add the Best Thematic Mutual Funds for 2025 to your portfolio? If yes, this analysis explores the top thematic funds, along with a detailed review of their performances, to determine whether or not these thematic mutual funds will be a valuable addition to you or not.

Let's first understand the 5 key parameters on which the 5 top-performing thematic funds have been shortlisted.

5 Key Principles to Pick the Best Thematic Funds

Here are the 5 simple ways to pick your sectoral and thematic funds for 2025:

• Alignment with Long-Term Trends: Select funds that focus on emerging trends (like tech or green energy) with strong growth potential and long-term growth potential.
• Sector Performance: Choose funds invested in high-performing sectors backed by research, consumer demand and government support.
• Diversification & Risk Management: Even with a specific theme, look for funds that spread risk across multiple companies to reduce volatility.
• Expense Ratio: Lower expense ratios mean more of your investment goes toward growth. Compare costs across similar funds.
• Fund Manager Expertise: A skilled manager with a strong track record in thematic investing is key to navigating trends and achieving solid returns.

List of 5 Best Thematic Mutual Funds Suited for Long-term Growth

Here are the top 5 thematic Mutual Funds to start your SIP in 2025:

1. ICICI Prudential Manufacturing Fund

As a manufacturing-theme fund, the core strategy is to buy quality companies at low valuations for long-term growth. The ICICI Prudential Manufacturing Fund follows an active investing approach, with Mr. Sankaran Naren having 27+ years of expertise. He uses a combination of top-down and bottom-up analysis to select stocks, focusing on companies with good profitability and a competitive advantage. However, this thematic fund maintains a well-diversified portfolio with conservative management to minimize risks to give steady growth.

Now, let's take a look at the impressive results this fund has achieved in 3 and 5 years time frame:

The graph above shows the fund's returns as 27.74% over 3 years and 25.42% over 5 years, significantly outperforming its benchmark of 23.98% and 23.88%, respectively.

Now imagine if you had started an SIP of Rs.3000 in this fund 5 years ago, your total investment would have been Rs.1,80,000. However, you would have an accumulated wealth of Rs.3,21,157 as of now.

2. Franklin India Opportunities Fund

As an opportunity-driven Equity Fund, the core strategy is to invest in companies that are focused on targeting India's economic and industry transformations. The Franklin India Opportunities Fund uses active investment techniques as its core investing strategy. It gives flexibility to the fund manager to focus on targeting companies with high growth potential across different sectors. Likewise, it keeps an eye on generating consistent long-term capital for you. It does so by distributing the assets among large, mid and small cap stocks, keeping a balanced portfolio to give a full spectrum of India's growing economic potential.

The graph above shows the fund’s returns as 15.99% over 3 years and 15.5% over 5 years, outperforming its benchmark with a close margin of 14.52% and 14.5%, respectively.

For example, if you had started an SIP of Rs. 3000 in this fund 5 years ago, your total investment would have been Rs. 1,80,000. However, your profits would have amounted to Rs. 3,09,879 as of now.

3. Canara Robeco Consumer Trends Fund

These type of thematic funds follows a broader investment approach by giving you a diversified portfolio by investing in strong businesses that give you an edge over economic cycles, providing reliable returns and stability over the long term.

How do these best thematic Mutual Funds help you achieve high returns? It’s simple, being a consumption fund it uses a Bottom-Up Stock Picking approach, focusing on companies with sustainable competitive advantages and high-quality management. The strategy is to invest in businesses that are strong, well managed with strong long-term growth.

It also emphasizes a long-term view, aiming for sustained growth over time by investing in long-term earnings and high-growth companies that are well managed by mutual funds experts.

Let’s now take a quick look at the returns delivered by this fund over 3 to 5 years:

In the above graph, you can see the Canara Robeco Consumer Trends Fund delivered 31.50% SIP returns over 3 years, significantly outperforming its benchmark returns of 18%.

If you had started a SIP of Rs. 3000 three years ago, your total investment would be Rs. 1,08,000. However, your portfolio would now show a total of Rs. 1,68,809, reflecting the strong growth and solid performance of this fund.

4. ICICI Prudential Commodities Fund

After being launched in October 2019, this thematic equity fund follows a well-rounded investment approach by seeking growth opportunities in commodity-linked sectors like metals, energy and agriculture.

Let’s take a look at the 3 and 5 years rolling returns of this fund with the help of a bar graph:

In the above graph, you can see the ICICI Prudential Commodities Fund delivered 38.29% returns in 3 years strongly outperforming its benchmark returns of 24.96%.

If you had started a SIP of Rs.3000 that too 3 years ago, the total investment would be Rs. 1,08,000. In comparison, your portfolio will show a whopping total of Rs.1,49126 on today's date.

5. Tata Business Cycle Fund

This business cycle fund by the Tata Mutual Fund has emphasized its focus on the cyclical stocks (midcap, small-cap, and growth-oriented firms) at their expansion phase.

Refer to the 101 guide to What is Business Cycle Fund: Best for High Returns? 

Here, the fund manager, Mr Rahul Singh, follows a unique investment approach to shift defensive stocks (large-cap, stable companies) at the time of contraction. This flexibility keeps the sector-focused approach in the portfolio and gives room to adjust according to the market trends. It is best suited if you have a tight stomach to handle the portfolio churn due to shifts in market cycles.

Let’s see the below graph to see how it performed over different years:

In the above graph, you can see the Tata Business Cycle Fund delivered 25.88% returns in 3 years strongly outperforming its benchmark returns of 15.48%. Likewise, it continued its consistent record to beat its benchmark with 33.26% returns in 5 years.

If you had started a SIP of Rs.3000 that too 3 years ago, the total investment would be Rs.1,08,000. In comparison, your portfolio will show a whopping total of Rs.1,58,793 on today's date.

To Conclude on Thematic Funds for 2025

In short, investing via the Best SIP Platforms in these best thematic mutual funds is like a once-in-a-lifetime offer that lets you participate in shaping the world as of now. If you are into eco-friendly living or support the idea of EV or green energy revolution, these thematic funds will be the best pick of 2025 for you.

Read more- 

1. What is Freedom SIP in Mutual Funds? Experts Guide
2. 3 Best Large and Midcap Funds to Invest in 2025: Expert Picks
3. 3 Top Consumption Mutual Funds in India