India, Sept. 20 -- Diversification and equity investing have been almost the same thing for decades. A diversified fund gave you exposure to many different industries, which helped you ride the overall growth of the economy and smooth out the shocks of any one sector. It was neat, made sense, and mostly worked.

But if you look at the Indian fund industry today, you'll see a new trend starting to take shape. Sectoral and thematic funds, which used to be thought of as niche, have been growing very quickly.

This change brings up an important question: why are more investors moving towards themes and sectors instead of sticking with broad-based diversification?

Thematic funds are interesting for more than just the money they make. They go ...