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Can I Invest In AI, Green Energy, Or EVs Through Mutual Funds?

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With all the talk about artificial intelligence (AI), green energy, and electric vehicles (EVs), you may be curious about how to invest in these areas. The good news is that anyone can invest in these megatrends, without needing too much money or knowledge for it. Mutual funds can help you put your money into these exciting sectors in a simple way.

Let’s take a look at what these megatrends are and how you can invest in them through mutual funds.

  • Table of contents

Why are people excited about AI, green energy and EVs?

These sectors are growing fast across the world. Beyond just being trends, these spaces are actively shaping the future of the world. Here’s why they are getting so much attention:

Electric vehicles (EVs) are becoming more popular as people look for cleaner transport. A BloombergNEF report projects that by 2040, more than half of new car sales worldwide will be electric.

These trends have the potential to be sustained for years. That’s why many investors want to be part of this change.

Also Read: Understanding Megatrends For Mutual Fund Investments

What are mutual funds and how do they help?

A mutual fund is like a basket that holds money from many people and invests that money in a mix of shares, bonds, or other assets. A professional fund manager handles the buying and selling.

Some reasons why mutual funds are a great way to invest in future trends:

  • You don’t need to pick individual stocks. Financial experts do it for you.
  • Your money is spread across different companies, which lowers your risk.
  • You can start with small amounts as low as Rs. 500 in some cases.
  • It’s easy to track and manage both offline and online.

You don’t need to be a stock market expert. You just need to pick the suitable type of mutual fund.

How can I invest in AI, green energy or EVs through mutual funds?

You can invest in these sectors in two main ways through mutual funds:

  1. Thematic or sectoral funds: These funds focus on a specific theme or sector. For example:
  • Technology funds: Some of these invest in companies working with AI, cloud computing, and robotics.
  • ESG or green funds: These invest in companies that care about the environment and follow green practices.
  • EV and new energy funds: Some newer funds target electric vehicle makers, battery companies, and clean energy firms.

Always check what the fund focuses on. Read the fund’s factsheet or talk to your financial advisor.

  1. International funds: Some mutual funds in India let you invest in global companies. For example:
  • Funds that invest in US tech stocks may include companies like Google, Microsoft or Nvidia, all of which are big players in the field of AI.
  • Some funds invest in global clean energy firms or EV companies like Tesla.

This gives you a chance to ride the global growth wave, beyond just the local one.

  1. Bajaj Finserv AMC and Megatrends: At Bajaj Finserv AMC, Megatrends are a cornerstone of many funds. Several schemes – Bajaj Finserv Flexi Cap Fund, Bajaj Finserv Healthcare Fund and Bajaj Finserv Consumption Fund – follow a megatrends investing strategy. These funds look for potential opportunities in Technological, Regulatory, Economic, Natural (environment), Demographic and Social (TRENDS) shifts to build a relatively resilient portfolio with long-term growth potential. Investing in such funds can give you an easy and accessible way to tap into megatrends and build a future-oriented portfolio.

What should I keep in mind before investing?

These sectors are growing fast, but they can also be risky. Some things to keep in mind:

  • Prepare for volatility: While megatrends can be relevant for years, there will still be the risk of volatility, especially in the short term. In particular, sectoral and thematic funds may entail greater risk because of portfolio is concentrated in one or a handful of sectors. Cyclical ups and downs are likely.
  • Think long term: Such funds are suitable for those who can stay invested for at least 5–7 years to allow these megatrends to play out over time.
  • Diversify: A thematic/sectoral fund can be a part of a portfolio but it is also advisable to invest in other asset classes and broad market funds for more diversification and risk management.
  • Understand the fund: Always read about what the fund is investing in. If you have further questions, you can with a financial advisor.

Should you invest in these sectors now?

The answer to that question depends on your goals and comfort with risk. If you are excited about the future and want to be part of these fast-growing changes, these funds can be a way to invest. But don’t rush in just because something sounds trendy.

Here’s how you can get started:

  • Start small
  • Balance your investments
  • Keep learning

Also Read: Impact Of Technology On Mutual Fund Investments

Conclusion

AI, green energy, and EVs are shaping the future. Major global reports and experts agree that these areas will see strong growth in the coming years. Through mutual funds, you don’t need to be a tech wizard or an environment expert to invest. You just need to be curious, cautious, and consistent.

Bajaj Finserv AMC schemes with Megatrends investing

To know more about the Bajaj Finserv Flexi Cap Fund and for statutory details, click here.

To know more about the Bajaj Finserv Healthcare Fund and for statutory details, click here.

To know more about the Bajaj Finserv Consumption Fund and for statutory details, click here.

Soumya Rao
  • Sr Content Manager, Bajaj Finserv AMC Soumya Rao is a writer with more than 10 years of editorial experience in various domains including finance, technology and news.

Bajaj Finserv Small Cap Fund

Give your portfolio the 3-in-1 advantage with the Bajaj Finserv Small Cap Fund. Built on three approaches—Quality, Growth and Value—it focuses on fundamentally sound businesses with long-term scalability, available at reasonable valuations. Backed by a disciplined risk management framework, it aims to navigate volatility while tapping small-cap opportunities. To read more about Bajaj Finserv Small Cap Fund and for statutory details, click here.

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Disclaimer

Mutual Fund investments are subject to market risks, read all scheme related documents carefully. This document should not be treated as endorsement of the views/opinions or as investment advice. This document should not be construed as a research report or a recommendation to buy or sell any security. This document is for information purpose only and should not be construed as a promise on minimum returns or safeguard of capital. This document alone is not sufficient and should not be used for the development or implementation of an investment strategy. The recipient should note and understand that the information provided above may not contain all the material aspects relevant for making an investment decision. Investors are advised to consult their own investment advisor before making any investment decision in light of their risk appetite, investment goals and horizon. This information is subject to change without any prior notice. The content herein has been prepared on the basis of publicly available information believed to be reliable. However, Bajaj Finserv Asset Management Ltd. does not guarantee the accuracy of such information, assure its completeness or warrant such information will not be changed. The tax information (if any) in this article is based on prevailing laws at the time of publishing the article and is subject to change. Please consult a tax professional or refer to the latest regulations for up-to-date information.

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Alpha (a) is a term used in investing to describe an investment strategy’s ability to beat the market.


Alpha is thus also often referred to as excess return or the abnormal rate of return in relation to a benchmark, when adjusted for risk. Essentially, it means doing better than the crowd without taking disproportionate risk.

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Collecting superior information

Analysts and portfolio managers strive to collect superior information about the business and the management of the company. They try to generate superior earnings forecast and the balance strength of the company and the industry, thereby trying to 'beat the market' on information edge. This is an important source of alpha for an investor. However, over the years, retaining the information edge has become more difficult and expensive. With a whole lot of investors trying to collect superior information, how can an investor be sure to continuously have accurate and material information about the companies, ahead of others, all the time?

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Processing information better

Even if you don't have material information earlier than the crowd, you can still generate better outcomes if you are able to process this information better. Investors develop models and algorithms with enhanced predictive powers to forecast the next move. Fund managers who invest based on some pure formal analytical models are quantitative managers. Here, the goal is to try and beat other investors based on the sophistication of procedures or analytics. The analytical edge can be quite useful until it gets copied by many, and then it may stop generating superior returns.

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Exploiting behavioural biases

As the name suggests, this edge is achieved by superior behaviour in reacting to the inputs available to maximise alpha. Modern finance assumes people behave with extreme rationality. However, researchers in behavioural finance have shown that this is not true. Moreover, these deviations from rationality are often systematic. Behavioural managers try to exploit situations where securities are mispriced by the market because of behavioural factors. At Bajaj Finserv AMC, we endeavour to combine the best of these edges.