Business cycle funds: the next big category or another investment promise?
The comparison investors often miss, however, is with thematic funds. A thematic fund typically makes a long-term bet on a structural trend—manufacturing, exports, defence, digitalisation or consumption. While a handful of themes are diversified enough to resemble all-weather portfolios, most are inherently concentrated, and the challenge is knowing not just when to enter a theme but when to exit it. Business cycle funds attempt to solve this problem by sitting one level above thematic funds, allocating capital between themes as conditions change, rather than committing to just one.
