What are Thematic Energy Mutual Funds?

Thematic energy mutual funds are mutual funds that invest across companies in the energy sector. Thematic energy mutual funds invest in businesses that center their economic activities around the production, discovery, development, and distribution of energy and natural resources, mining, etc. These mutual funds invest at least 80% of their assets into companies working in the energy and natural resources sectors. This article will discuss the top 10 thematic energy mutual funds in India, the stocks they invest in, and how the Indian energy industry is changing.

Top 10 Thematic Energy Mutual Funds in India

1. Quant Active Fund

The fund has invested 99.37% of its assets in Indian energy stocks. The companies include:

a. Vedanta Ltd. – a copper and copper products company

b. Linde India Ltd. – an industrial gas company

c. IRB Infrastructure Developers Ltd. – a civil construction company

d. Adani Enterprises Ltd. – a trading company

2. Mahindra Manulife Multi Cap Badhat Yojana

The fund has invested 96.2% of its assets in Indian energy stocks. Some of them are:

a. Reliance Industries – a multinational conglomerate company

b. Infosys Ltd. – an information technology company

c. ITC Ltd. – an IT service management company

d. Hindustan Aeronautics Ltd. – an aerospace company

3. ICICI Prudential Small Cap Fund

The fund has invested 86.16% of its assets in Indian energy stocks. The fund invests in small companies. Therefore, these funds fall more when stock prices drop. While you can expect high returns, in the long run, there will be many ups and downs in the short term.

The fund has invested in companies such as:

a. Birlasoft Ltd. – a computer software company

b. KEI Industries Ltd. – a cable and electrical company

c. Jamna Autos Inds. Ltd. – an auto ancillaries company

d. V-Mart Retail Ltd. – a retail company

e. Blue Star Ltd. – an air conditioner company

4. Baroda Multi Cap Fund Plan A

The fund has invested 96.82% of its assets in Indian stocks. The fund’s investments include companies such as:

a. Reliance Industries – a refineries and marketing company

b. Sun Pharmaceuticals Industries Ltd. – a pharmaceuticals company

c. Jindal Steel & Power Ltd. – a steel company

d. Hindustan Petroleum Corporation Ltd. – a refineries and marketing company

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5. SBI Contra Fund Direct Plan

81.05% of the fund’s investments include Indian companies. The companies include:

a. GAIL (India) Ltd. – a gas transmission company

b. NHPC Ltd. – a power and energy company

c. Reliance Industries Ltd. – a refineries company

d. NMDC Ltd. – an industrial minerals company

e. Ambuja Cements Ltd. – a cement company

6. SBI Contra Fund

The fund has invested around 86.93% of its assets in Indian stocks. The companies that the fund has poured investments into include:

a. Tube Investments of India Ltd. – an auto ancillaries company

b. HCL Technologies Ltd. – a computer software company

c. ICICI Bank Ltd. – a banking company

d. NHPC Ltd. – a power and energy company

e. NMDC Ltd. – an industrial minerals company

7. Invesco India Multi Cap Fund

This fund has invested around 97.05% of its assets in Indian companies. The companies include:

a. Bharat Electronics Ltd. – an industrial electronic company

b. Bajaj Finance Ltd. – a financial services company

c. Axis Bank Ltd. – a banking company

d. Mphasis Ltd. – a computer software company

8. BNP Paribas Multi Cap Fund

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This fund scheme seeks to secure long-term capital growth from an actively managed portfolio of Indian stocks. The sectors the fund has invested in include:

a. Private banking companies

b. Retail companies

c. Computer software companies

d. Refineries

e. Pharmaceutical and drug companies

9. Principal Multi Cap Growth Fund

The fund has invested 95.71% of its assets in Indian stocks. Below are the top 5 sectors and the investments allocated to that sector by the fund.

a. Private banking sector – 20.82%

b. Public banking sector – 13.07%

c. Financing and investments – 12.50%

d. Construction sector – 11.82%

e. Computer software sector – 11.42%

10. ICICI Prudential Small Cap Fund Direct Plan

This fund has 86.16% of its investments poured into Indian companies, some of which include:

a. Blue Star Ltd. – an air conditioner company

b. Cyient Ltd. – IT services and software company

c. V-Mart Retail Ltd. – a retail company

d. BirlaSoft Ltd. – a computer software company

e. Jamna Autos Inds. Ltd. – an auto ancillaries company

The Indian Energy Sector Outlook

The Indian energy sector is currently undergoing a significant transformation that will redefine the industry’s outlook. Increasing economic growth drives the electricity demand in India. With the government focusing on ‘power for all’, the energy capacity expansion has accelerated in the country.

The government has committed to increasing the country’s use of green energy sources. It is currently working on several large-scale clean power projects across the country. The government has also extensively promoted the use of green energy. Renewable energy can provide a large number of employment opportunities at all levels, especially in rural areas.

The Indian government has plans to create one ‘green city’ in each state. These cities will be driven by renewable energy. The cities will have solar rooftop systems in every house, solar parks on the outskirts of the city, waste-to-energy facilities, and public transportation systems driven by electricity.

The development of renewable energy projects under the National Electricity Policy will contribute to the Indian energy sector’s additional growth.

Energy Sector Growth Drivers

There are many factors that contribute to the growth of the energy industry in India. Some of them include:

1. Electricity demand:

The country’s demand for electricity has risen significantly. Industry experts expect this demand to continue to rise in the coming years. The country needs a substantial increase in electricity capacity installations to meet the people’s growing energy demand.

2. Government Commitments:

The Indian government has committed to achieving carbon reductions worth 1 billion tonnes by 2030. The country has also targeted 2070 as the year it will achieve carbon neutrality. The government also has plans to increase the country’s renewable energy capacity to 500 GW by 2030.

3. Solar Parks and Cities:

The country has plans in place for the development of 1 solar city in every state and 45 solar parks across the entire country.

4. New Opportunities:

India’s energy sector thrives with a wide range of opportunities in the renewable energy industry. These include green hydrogen, floating solar PV, offshore wind energy, and solar hybrid projects.