Thematic mutual funds are investment vehicles that focus on a specific theme, sector, or trend in the economy, such as technology, healthcare, renewable energy, or consumption-driven growth. Unlike traditional diversified funds, these funds concentrate on companies that are expected to benefit from the chosen theme, allowing investors to capitalise on emerging trends and high-growth sectors.
While thematic funds offer the potential for substantial returns, they also carry higher risk due to their concentrated exposure, making it essential for investors to align them with their financial goals and risk appetite.
In this article, we’ll take a closer look at the best thematic mutual funds in India for December 2025 based on different parameters.
| Name | AUM (₹ Crore) | 3Y CAGR (%) |
| Franklin India Opportunities Fund | 8,188.58 | 29.87 |
| ICICI Pru Transportation and Logistics Fund | 3,017.81 | 29.68 |
| Invesco India PSU Equity Fund | 1,465.99 | 29.40 |
| SBI PSU Fund | 5,521.37 | 28.79 |
| ICICI Pru PSU Equity Fund | 1,967.47 | 27.67 |
Note: The Thematic Mutual Funds mentioned above have been selected and sorted based on 3Y CAGR with a minimum AUM of ₹ 1,000 Crore as of Dec 2, 2025
SBI PSU Fund is an open-ended equity scheme that primarily invests in Public Sector Undertakings (PSUs) and their subsidiaries. The fund is designed to offer investors the potential for long-term capital growth while maintaining liquidity.
Franklin India Opportunities Fund is an open-ended equity fund suited for investors seeking long-term capital appreciation. It focuses on investing in companies with special situation themes, aiming to capture growth opportunities arising from unique market scenarios.
Invesco India PSU Equity Fund seeks capital appreciation by investing in equity and equity-related instruments of companies where the Central or State Government holds a majority stake, exercises management control, or has the authority to appoint most of the directors.
| Name | AUM | Tracking Error |
| Motilal Oswal Business Cycle Fund | 2,151.21 | 8.07 |
| Union Innovation & Opp Fund | 1,130.77 | 7.39 |
| Axis Momentum Fund | 1,277.93 | 6.01 |
| HDFC Defence Fund | 7,556.72 | 5.90 |
| HSBC Business Cycles Fund | 1,161.00 | 5.89 |
Also Read: Best Gold ETFs in India for December 2025: SBI Gold ETF, HDFC Gold ETF, and More
Investing in thematic mutual funds can be a strategic way to participate in the growth of promising sectors and trends, potentially enhancing portfolio returns. However, the concentrated nature of these funds demands careful research, continuous monitoring, and a clear understanding of market dynamics. When approached thoughtfully and aligned with long-term objectives, thematic investing can complement a diversified portfolio and offer a focused path to wealth creation.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Dec 2, 2025, 12:03 PM IST
Sachin Gupta
Sachin Gupta is a Content Writer with 6+ years of experience in the stock market, including global markets like the US, Canada, and Australia. At Angel One, Sachin specialises in creating financial content that simplifies complex market trends. Sachin holds a Master's in Commerce, specialising in Economics.
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