A rush of thematic Exchange Traded Funds (ETFs) is giving investors new tools to gain exposure to hot global trends, and it makes sense when investing in emerging themes to take a diversified approach through a fund and look globally. Why bet on a few local stocks when you can own dozens in one trade, knowing there are always many more losers than winners in megatrend investing?
However, the global ETF industry has a habit of launching thematic ETFs that cash in on hot trends but can disappoint. It’s too soon to know if tech ETFs will deliver. The ETFS Robo Global Robotics and Automation ETF (ROBO), which includes robotics, automation and artificial intelligence (AI) stocks, has had a solid start. The BetaShares Global Cybersecurity ETF (HACK) has starred, with a 45% return over 12 months, and the ETFS Morningstar Global Technology ETF (TECH) has a 39% return over one year to September.
We do know tech ETFs are being issued after an incredible bull run in tech stocks, and that hype about robotics, AI, electric vehicles, cybersecurity and Asian tech stocks is rampant.