Antimatter just passed the gravity test

Particle physicists at CERN in Switzerland have found the answer to one of the great mysteries of physics: How does antimatter fall?

It’s the first-ever observation of free-falling antimatter, which proved that atoms of antihydrogen are pulled downward due to gravity, as their matter equivalents.

Wait. What’s anti-hydrogen?

Well, that’s a positron orbiting an antiproton. Positrons are positively charged electrons and antiprotons are basically negatively charged protons.

To understand all that sub-atomic phenomenon, we need to take a quick trip to the exotic and explosive world of antimatter.    

We learned at school that everything we see around us is made up of matter. All matter consists of atoms, which in turn, consist of protons, neutrons and electrons.

Antimatter is matter’s evil twin. Its particles share the same mass as their matter counterparts, but qualities such as their electric charge are opposite. And this makes it explosive. When any matter comes into contact with antimatter, they annihilate each other, releasing all the energy stored inside them.

Remember the antimatter explosion scene of Dan Brown’s Angels and Demons – when a little bit of the stuff blew up over Vatican City? The science depicted in the movie is based on fact.

It doesn’t sound like antimatter can be real, but it does exist in the universe. The good news is that there is not much antimatter to be found around our planet to annihilate our existence.

However, physicists at CERN have been making it at the Antimatter Factory for some time now, to study this elusive and most expensive substance on Earth.  

[One gram of antimatter may cost about $62.5 trillion, that’s around ₹5,000 billion]

So, what’s new?

Particle physicists found that antihydrogen atoms, released from the magnetic confinement in CERN’s ALPHA-g apparatus, behave consistent with gravitational attraction to the Earth.

The successful experiment will now allow precision analysis of the magnitude of gravitational acceleration between anti-atoms and the Earth, to test the weak equivalence principle of the general theory of relativity.

“It has taken us 30 years to learn how to make this anti-atom, to hold on to it, and to control it well enough that we could actually drop it in a way that it would be sensitive to the force of gravity. The next step is to measure the acceleration as precisely as we can,” says Jeffrey Hangst, ALPHA researcher & spokesperson, CERN

This ‘proof-of-principle experiment’ by ALPHA researchers at CERN is a confirmation of Einstein’s general theory of relativity, which postulates that all masses, irrespective of differences in their internal structures, react to gravity in a similar manner. 

CERN’s Antimatter Factory is a unique facility in the world for producing and studying antimatter. The experiments at this facility are aimed at measuring with high precision the gravitational acceleration of atomic antimatter.  

[Business Standard]

Thematic funds – Performance tracing with a narrative

Sure you have come across the terms sectoral fund and thematic fund, often used loosely by investors. But they are not the same. While a sectoral fund invests in a particular industry sector, thematic fund can invest in diverse sectors around a particular opportunity or a business ‘theme’. 

A thematic fund is an equity mutual fund that invests in stocks around a theme that could be infrastructure, commodity, rural India, international etc.

They tend to be attractive to retail as well as institutional investors, who often call it ‘performance tracing with a narrative’. These funds come with a great story and a bunch of stocks that generate impressive returns.

Investment approach

Consider this: A fund manager or an asset management company (AMC) identifies growth potential or consumption boost in a particular theme, say opportunities in real estate/housing. The AMC may launch, say, a ‘Housing Opportunities Fund’ that will invest in a range of sectors like housing finance, consumer electronics, cement, banks, steel, power and more.   

A thematic fund can invest across different sectors and market caps (large cap, mid cap, small cap) as long as it conforms to the housing theme. The minimum investment in equity and equity-related instruments of a particular theme should be 80% of the asset under management (AUM), mandates SEBI. 

Thematic funds use a top-down investment approach. For a particular theme, the asset manager first takes a broad view of the economy and markets, including global trends. If there is enough opportunity, the asset manager or AMC begins to investigate related sectors and individual stocks to invest.

Common thematic funds

1. IT or Digital Funds

2. Pharma Funds

3. MNC Funds

4. PSU Funds

5. Dividend Yielding Funds

6. Infrastructure Funds

Advantages

Thematic funds are all the rage, ever since the pandemic ebbed and the markets returned to high growth path. Recent news reports indicate returns of thematic funds, such as public sector undertaking (PSU), infrastructure, consumption and information technology fared well, compared to the large-cap fund category in the past one year. Analysts say, these funds are cyclical in nature and have given higher returns during the period.

High returns for each ‘theme’ have respective opportunity factors. For example, attractive valuation and hope for privatisation have led to major rerating in PSU stocks. The government’s infrastructure push has led to a rally in the sector. The technology sector, despite corrections, continued to remain one of the top performers in the past few years. Growth opportunities, as such, make thematic funds attractive to long-term investors.

Thematic funds also have some inherent advantages compared to sectoral funds and mutual funds that follow conventional investment strategies. As we already know now, a thematic fund is more diversified than a sectoral fund, having its investments diversified in several sectors and not just in one.

Most importantly, it offers an investor the opportunity to invest in theme-related sectors that have a high growth potential.

 Here’s more:

>Since thematic funds invest in stocks and sectors that are closely related in their business scope, the fund is more focused and easy to track

>Since thematic funds carry a high degree of risk, they are likely to deliver high capital appreciation in the long-term

>Since certain themes like information technology (IT), robotics, EVs, renewable energy and the sunrise sector projects significant growth potential, retail investors can take the advantage of early investment. One can increase allocation in these industries/themes by taking higher exposure in relevant themes if convinced with the improving environment for the industry.

Disadvantages

>Thematic funds are more volatile and riskier than the conventional equity funds

>Portfolio diversification is an essential part of effective investment strategy. But thematic investments can make investors put too many eggs in one basket and lose sight of portfolio diversification

>Thematic opportunities, if misinterpreted by the fund managers (who are caught up in their idea of what will be the next big trend), can lead to losses

>Yes, a lot depends on the tactical approach of fund managers. Best returns from thematic investment depend on the fund managers’ market timing. Unless stocks are bought low and sold high, thematic investment cannot offer the expected results

>Often performance-chasing by retail investors is negative for thematic funds. This is because most of the time when investors enter certain theme, valuations have already peaked and the fund has turned expensive

>Most retail investors lack the knowledge, research capability and temperament to sustain the volatility associated with thematic investments. As such, analysts suggest that novice retail investors should avoid thematic funds and stick to vanilla diversified funds

>The more exotic a fund gets, costs tend to rise, because things may not be competitive in those niches. So, an investor ends up paying more expense ratios.