Trends are everywhere—be it fashion, food, travel, or culture. The world of investing is no different. And just as lifestyle trends come and go, investment trends also emerge, gain traction, and then fade away. Therefore, it's important to actively monitor these changes and engage and exit them with a strategic, yet emotional approach. This can be crucial to seizing opportunities and avoiding being left behind.

But when investing in trends or themes, most retail investors find it difficult to overcome emotions like greed or fear, especially during market fluctuations. They either stay invested for too long or start investing too late. For example, in the late 1990s, technology and internet stocks were trending. Investors flocked to these sectors and reaped handsome profits. But as more money flowed into them, valuations began to outpace fundamentals.

The 2013 Taper Tantrum
However, retail investors' misgivings or the lure of higher returns kept them invested. When the dot-com bubble burst in the early 2000s, investors suffered heavy losses. On the other hand, when the taper tantrum began in 2013, the sharp market decline and the resulting fear forced investors to exit the markets. Foreign currency outflows boosted the value of the Indian rupee, but also provided investment opportunities in export-oriented sectors like pharmaceuticals and information technology.

What to consider when investing
One way to avoid falling prey to emotions when investing in themes is to invest in thematic mutual funds. These funds invest in businesses that are linked to specific, high-conviction trends or themes that are expected to be effective in the short to medium term. Thematic mutual funds are managed by professional fund managers who continuously research and monitor changing market dynamics. Their investment decisions are disciplined and data-driven, free from emotional biases such as fear and greed. This optimizes risk and returns.

Investors looking for opportunities across sectors and investment themes may consider the ICICI Prudential Thematic Advantage Fund (FoF). This fund of funds strategically invests in a portfolio of specialized sectoral and thematic funds. As of July 30, 2025, this fund of funds has delivered a one-year return of 8.23%. Over the long term, it has performed strongly with a CAGR of 20.68% over three years and 26.08% over five years.

Disclaimer: This content has been sourced and edited from Dainik Jagran. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.