While the differences are already quite evident, at their core, both concepts aim at differing objectives and target different breeds of investors.
A thematic fund usually takes a long-term view of various macroeconomic, geopolitical, and technological tailwinds and aims to capitalize on the same. These aren’t for investors who are looking to capture swings in the market.
On the other hand, a sectoral fund is focused on a particular sector. It is usually the purview of investors and traders looking for exposure owing to upcoming short-term events. They are also used for hedging when anticipating pullbacks in the broader market.