New Delhi, Jan. 13 -- Retail investors frequently find themselves in a dilemma over which mutual funds to invest in and which ones to overlook. Among a wide range of categories, such as flexi-cap, ELSS, value, multi-cap and contra funds, one category that is quite popular is thematic mutual funds.

Those who are not aware, thematic mutual funds select stocks of companies in industries that belong to a particular theme. For example, infrastructure, service industries, PSUs or MNCs. They are more diversified than sectoral funds and hence have lower risk than sectoral funds.

Collectively, there are 238 thematic (and sectoral) mutual funds with a total AUM (assets under management) of Rs.5.37 lakh crore, according to the latest AMFI data, re...