What Investors Should Know About Investing in Thematic ETFs

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Global X’s Jay Jacobs said investors should not underestimate the scope of thematic exchange-traded funds.

More than one-third of the thematic ETFs on the market have just launched in the last year and a half, and the field is rapidly expanding from its technology-focused roots, said the company’s senior vice president. The Chief Strategy Officer told CNBC. “ETF Edge” this week.

“I think the mistake some investors may make is to think that thematic investments are looking only at technology,” Jacobs said in an interview Monday.

Global X’s two fastest-growing ETFs of the year, Infrastructure development in the United States (PAVE) and Lithium battery technology (LIT), Jacobs added, there was no technical exposure.

“I think looking out of technology in the thematic areas was the key for investors to find that diversification,” he said.

Many tops Thematic ETFs are down Alex Sheppard, founding partner of ETF Actions, said in the same interview that so far investors need to agree on potential risks before making a purchase.

“The fact that volatility can be high and risk can be high is what we’re chasing when looking for above-average returns outside of these passive, broad-based indexes,” he said.

But new investment styles could help mitigate that risk like never before, Shepherd said.

“Just because most of the products on the market are considered passive does not mean that they are not being actively used around the core position,” he said. ..

Shepherd says he has only about $ 300 billion in assets following an aggressive strategy.

“Ten or twenty years ago, investors and advisors didn’t have the ability to be creative as well,” he said. “Now you’re looking at about 2,800 US-listed ETFs. They now have the tools to tilt the portfolio in some way based on their risk, their purpose, and it’s not historically there. was.”

What Investors Should Know About Investing in Thematic ETFs

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The post What Investors Should Know About Investing in Thematic ETFs appeared first on Eminetra.

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