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Thematic funds are slowly claiming their dominance in the investment world. Notably, the collective assets under management in these funds have risen nearly three times to roughly $195 billion globally from $75 billion, over a period of three years, ending Dec 31, 2019 (per a Morningstar report). Moreover, the figure is equivalent to around 1% of total global equity-fund assets, rising from the 10-year ago level of 0.1%. Also, the options available for thematic investing have increased over time. By the end of December 2019, around 923 thematic funds were available for investing in the market (per a Morningstar's global database), with 154 new thematic funds being added globally in 2019. North America has witnessed thematic assets tripling to $30.5 billion during the trailing three-year period through Dec 31, 2019 on the back of solid net inflows.
Let’s take a look at some of the themes that are currently trending the investment world.
AI, Robotics, and Cyber Security
We are living in an era largely dominated by AI applications and technological advancements. Revolutionary technologies like AI, ML and IoT are fast changing the business landscape by expanding opportunities, growing revenues and enhancing efficiencies. In fact, now the application of robots is not just limited to industrial use but a plethora of other areas like healthcare, entertainment, retail, automobile and defense. In fact, with almost 60% of thematic assets, technology is the most popular broad theme in North America. Going on, per a Morningstar report, Robotics and Automation is the most popular theme worldwide with more than $27 billion in assets.
However, increasing adoption of these technologies is exposing businesses, governments and organizations to cyber risks. Given the severity of the situation, Cybersecurity Ventures expects the worldwide expenditure on cybersecurity to surpass $1 trillion cumulatively from 2017 through 2021. Per a Grand View Research report, the global cyber-security market is expected to reach a worth of $241.1 billion, at a CAGR of 11% from 2019 to 2025. Accordingly, our investors can consider Global X Robotics & Artificial Intelligence ETF (BOTZ - Free Report) , First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT - Free Report) , ROBO Global Robotics & Automation ETF (ROBO - Free Report) , iShares Robotics and Artificial Intelligence Multisector ETF (IRBO - Free Report) , First Trust NASDAQ CEA Cybersecurity ETF (CIBR - Free Report) and ETFMG Prime Cyber Security ETF (HACK - Free Report) .
ESG and Alternative Energy Funds
Per Morningstar Inc., funds that consider the environmental, social and governance (ESG) investing strategy in the investment strategies outperform those that do not consider. Interestingly, 73% of ESG indexes have been beating their non-ESG counterparts since inception.
Meanwhile, alternative energy includes any energy source that acts as a replacement to conventional and non-renewable fossil fuel. Going by an International Energy Agency (IEA) report, worldwide supplies of renewable electricity are estimated to expand 50% within five years. Moreover, according to the IEA, renewable energy sources are anticipated to make up 30% of the world’s electricity by 2024 compared with the current 26%.
Thus, investors can take a look at the following ETFs like Xtrackers MSCI USA ESG Leaders Equity ETF USSG, Vanguard ESG U.S. Stock ETF (ESGV - Free Report) , iShares ESG MSCI USA ETF (ESGU - Free Report) , Nuveen ESG Large-Cap Growth ETF (NULG - Free Report) , Invesco Solar ETF (TAN - Free Report) , First Trust ISE Global Wind Energy Index Fund (FAN - Free Report) and ALPS Clean Energy ETF (ACES - Free Report) .
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Ride the Thematic Investing Trend With These ETFs
Thematic funds are slowly claiming their dominance in the investment world. Notably, the collective assets under management in these funds have risen nearly three times to roughly $195 billion globally from $75 billion, over a period of three years, ending Dec 31, 2019 (per a Morningstar report). Moreover, the figure is equivalent to around 1% of total global equity-fund assets, rising from the 10-year ago level of 0.1%. Also, the options available for thematic investing have increased over time. By the end of December 2019, around 923 thematic funds were available for investing in the market (per a Morningstar's global database), with 154 new thematic funds being added globally in 2019. North America has witnessed thematic assets tripling to $30.5 billion during the trailing three-year period through Dec 31, 2019 on the back of solid net inflows.
Let’s take a look at some of the themes that are currently trending the investment world.
AI, Robotics, and Cyber Security
We are living in an era largely dominated by AI applications and technological advancements. Revolutionary technologies like AI, ML and IoT are fast changing the business landscape by expanding opportunities, growing revenues and enhancing efficiencies. In fact, now the application of robots is not just limited to industrial use but a plethora of other areas like healthcare, entertainment, retail, automobile and defense. In fact, with almost 60% of thematic assets, technology is the most popular broad theme in North America. Going on, per a Morningstar report, Robotics and Automation is the most popular theme worldwide with more than $27 billion in assets.
However, increasing adoption of these technologies is exposing businesses, governments and organizations to cyber risks. Given the severity of the situation, Cybersecurity Ventures expects the worldwide expenditure on cybersecurity to surpass $1 trillion cumulatively from 2017 through 2021. Per a Grand View Research report, the global cyber-security market is expected to reach a worth of $241.1 billion, at a CAGR of 11% from 2019 to 2025. Accordingly, our investors can consider Global X Robotics & Artificial Intelligence ETF (BOTZ - Free Report) , First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT - Free Report) , ROBO Global Robotics & Automation ETF (ROBO - Free Report) , iShares Robotics and Artificial Intelligence Multisector ETF (IRBO - Free Report) , First Trust NASDAQ CEA Cybersecurity ETF (CIBR - Free Report) and ETFMG Prime Cyber Security ETF (HACK - Free Report) .
ESG and Alternative Energy Funds
Per Morningstar Inc., funds that consider the environmental, social and governance (ESG) investing strategy in the investment strategies outperform those that do not consider. Interestingly, 73% of ESG indexes have been beating their non-ESG counterparts since inception.
Meanwhile, alternative energy includes any energy source that acts as a replacement to conventional and non-renewable fossil fuel. Going by an International Energy Agency (IEA) report, worldwide supplies of renewable electricity are estimated to expand 50% within five years. Moreover, according to the IEA, renewable energy sources are anticipated to make up 30% of the world’s electricity by 2024 compared with the current 26%.
Thus, investors can take a look at the following ETFs like Xtrackers MSCI USA ESG Leaders Equity ETF USSG, Vanguard ESG U.S. Stock ETF (ESGV - Free Report) , iShares ESG MSCI USA ETF (ESGU - Free Report) , Nuveen ESG Large-Cap Growth ETF (NULG - Free Report) , Invesco Solar ETF (TAN - Free Report) , First Trust ISE Global Wind Energy Index Fund (FAN - Free Report) and ALPS Clean Energy ETF (ACES - Free Report) .
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>