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Thematic Investing Ideas to Boost Your Portfolio Returns in Q4

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Thematic investing continues to increasingly grab investors’ attention. The space is attracting retail and younger investors. Thematic ETFs do not invest in an entire market or single sector but rather in concepts, themes or trends. They allow investors to park their money in innovative industries and technologies as well as smaller companies that traditional GICS sectors do not include, according to a Bloomberg Intelligence (BI) report. 

Moreover, after witnessing a slump in the market in September, investors are seeking investing opportunities that can offer decent returns. All the broad market indices exited September in the red. The Dow Jones Industrial Average was down 4.3%. Moreover, the S&P 500 Index and the Nasdaq composite declined 4.8% and 5.3%, respectively.

Against this backdrop, let’s take a look at some of the themes that are currently trending in the investment world:

Clean Energy ETFs

Alternative energy includes any energy source that acts as a replacement for conventional and non-renewable fossil fuel. This space has been in the spotlight of late for many reasons. Increasingly, large corporations are making or promising investments to gain a carbon-neutral status.

Favorable government initiatives and federal policies, which include tax incentives to encourage installation, accelerated global market growth for clean energy in 2020. Moreover, despite turbulences stemming from the coronavirus pandemic, both solar and wind energies have been dominating the global renewable space of late.

President Joe Biden is expected to talk about climate emergencies on global platforms and ensure that the United States will achieve 100% clean energy economy and net-zero emissions, at least by 2050. Moreover, he pledged to reduce the U.S. greenhouse gas emissions to half by 2030 as stated in a Yahoo Finance article.

Thus, investors can consider the following ETFs, such as iShares Global Clean Energy ETF (ICLN - Free Report) , Invesco Solar ETF  (TAN - Free Report) ,  First Trust NASDAQ Clean Edge Green Energy ETF (QCLN - Free Report) and ALPS Clean Energy ETF  (ACES) (read: 5 Top-Ranked ETFs to Buy on the Dip).

Digital Payment ETFs

The world is gradually moving toward digitization that is increasing the dominance of technology in the financial sector. A Market Data Forecast (MDF) report also highlights the growing opportunities in the global financial technology market, which is expected to see a CAGR of 23.4% between 2021 and 2026. According to the report, the fintech space is expected to reach a market value of around $324 billion by 2026.

Along with increased interest in online shopping, customers are resorting to digital payments to clear their bills. At the same time, merchants and utility providers are increasingly advocating the same.

In such a scenario, investors can take a look at  the ETFMG Prime Mobile Payments ETF  (IPAY - Free Report) ,  Ecofin Digital Payments Infrastructure Fund  (TPAY - Free Report) and  Global X FinTech ETF  (FINX) (read:  A Comprehensive Guide to Fintech ETFs).

AI, Robotics & Cyber Security ETFs

AI is fast changing the business landscape by expanding opportunities, driving revenues and enhancing efficiencies. It helps enhance almost everything including advertising, healthcare, robotics, retail, video streaming, gaming and urban development.

We are living in an era, largely dominated by AI applications and technological advancements. Amid the coronavirus crisis, demand for online services increased, which in turn, led to the dominance of AI. Globally, the AI market is estimated to see a CAGR of 29%, rising from $42.8 billion in 2019 to $152.9 billion in 2023, according to an Analytics Insight article.

The robotics market is flooded with opportunities as robots are being used for jobs, such as sanitizing hospitals, homes and workplaces along with monitoring, surveying, handling, and delivering food and medicines.

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 cybersecurity market is expected to reach worth $241.1 billion, witnessing 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),  First Trust Nasdaq Cybersecurity ETF (CIBR) and  ETFMG Prime Cyber Security ETF  (HACK) (read: 5 ETFs to Gain on Cisco's 4-Year Growth Outlook).

Cloud Computing ETFs

Cloud computing and storage are expected to stay in vogue during 2021. The space received quite a push amid the coronavirus outbreak with a vast population working from home across the globe. Considering the accelerated coronavirus vaccine rollout globally, demand for cloud computing is set to stay robust even after the pandemic dies down.

It is worth knowing here that cloud computing and storage found applications in social networking, messaging apps and on streaming services. It empowered video conferencing, gaming, e-commerce shopping, remote project collaboration, online classes, editing, etc. Cloud computing is also supporting organizations in remotely processing a lot of information plus developing and running key applications as well as services.

Thus, investors can consider First Trust Cloud Computing ETF (SKYY - Free Report) , Global X Cloud Computing ETF (CLOU - Free Report) and WisdomTree Cloud Computing ETF  (WCLD) (read: Cloud Computing ETFs Looking Great: Let's Explore).

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