Thematic ETFs provide exposure to stocks that may benefit from certain secular growth trends expected to transpire over the next several years. Investment themes such as artificial intelligence and robotics, cybersecurity, green energy, infrastructure, and biotechnology (among others) generally have little representation in ETFs tracking broad market indices. By implementing thematic ETFs, investors can broaden their equity holdings with targeted exposure to industries poised for robust growth and technological innovation.
In our Q1 2021 edition of Inside First Trust ETFs, we offered four principles for investment professionals seeking to incorporate thematic investments into client portfolios. Although investor sentiment has been weakened by the bear market that emerged in 2022, we believe significant opportunities remain for long-term investors. For those considering exposure to thematic investments, we believe these principles may be worth revisiting.
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