Thematic Funds are:2 pointsa) Sector Fundsb) More concentrated than Sector Fundsc) More broad based than Sector Fundsd) None of the above

Analysis of Thematic Funds

Thematic funds are a type of investment fund that focuses on specific themes or sectors within the market, rather than simply following a broad market index. Understanding the choices provided can help clarify the nature of thematic funds:

1. Sector Funds: These are funds that invest in a specific sector of the economy, like healthcare or technology. Thematic funds, while often aligned with certain sectors, can also transcend sectors.

2. More Concentrated than Sector Funds: Thematic funds typically concentrate investments around a specific theme, which may make them more concentrated than traditional sector funds. However, the degree of concentration depends on the theme itself.

3. More Broad Based than Sector Funds: Thematic funds are usually not broader; rather, they focus on specific trends or themes. This makes them less diversified compared to broad market funds or even sector funds.

4. None of the Above: Given the characteristics of thematic funds, this option is not accurate.

Conclusion

Considering these points, the correct answer that accurately describes thematic funds would be b) More concentrated than Sector Funds. Thematic funds often target specific investments aligned with a trend, leading to a more concentrated risk profile compared to more generalized sector funds.