Sectoral And Thematic ETFs Break Monotony, Add Flavour To Portfolio

In a recent discussion with Kundan Kishore, deputy editor of Outlook Money, Chintan Haria, the head of product development and strategy at the ICICI Prudential Mutual Fund, and Mohit Gang, the chief executive officer of Moneyfront, an investment platform, spoke about the importance of investing in sectoral and thematic exchange-traded funds (ETFs). Here are some edited excerpts from the discussion. How sectoral and thematic ETFs are different from thematic funds? Chintan: Sectoral funds have a long history. They are actively managed funds where a mutual fund manager makes buying and selling decisions based on the assets within a particular sector, such as IT, pharma, or banking. On the other hand, ETFs, like IT ETFs or banking ETFs, aim to replicate the composition of a benchmark index precisely, including stocks and their respective weights. This strategy eliminates stock picking and...