Thematic funds are most likely characterized by:

Thematic fundsfocus onspecific investment themes(e.g., renewable energy, clean tech, diversity-focused companies), often leading toconcentration riskandlimited portfolio diversification. Because they focus on anarrow subsetof industries or trends, their risk profile ishigherthan broadly diversified funds.

While some thematic funds may outperform in certain cycles (C),performance is not guaranteed, and they can underperform in downturns. Poor cash flow profiles (A) depend on the companies selected, not a universal characteristic of thematic funds.