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Over the past few years, thematic ETFs have grown in popularity among financial professionals seeking exposure to a variety of investment trends, many of which are related to innovative, high-growth industries. While there is no industry-standard definition for what makes an ETF "thematic," we generally consider those that seek to capture specific trends—often outside of broad sector constraints—as thematic investments. Many of these ETFs focus on secular growth opportunities in digital technologies such as cybersecurity, cloud computing, and blockchain, while some target trends in other industries such as water, agriculture, and green energy. For investment professionals seeking to incorporate thematic ETFs in client portfolios, we offer a few considerations and suggestions below.
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