Thematic ETFs, which tend to offer exposure to growthier segments of equities, are yet to see a pick-up in flows despite current bullish sentiment.
According to data from ETFbook, thematic ETFs have seen $116m outflows so far in 2024, as at 22 March, adding to the $1.1bn net redemptions seen last year versus a combined $16.3bn inflows in 2021 and 2022. Assets in thematic ETFs currently total $44bn, as at the end of 2023.
Now, with Nvidia’s dramatic performance, there is reason for fund selectors to be cautious. Not only does the chipmaker take up a significant portion of mainstream benchmarks but it has accounted for over a third of the returns across many thematic ETFs.
As a result, how thematic ETFs fit within a multi-asset portfolio is a key consideration for fund selectors who are having to cope with overconcentration issues and a potentially volatile outlook.
The April 2024 issue of ETF Insider focuses on the challenges facing thematic ETFs, how they fit within a multi-asset portfolio and the challenges of balancing theme purity, diversification and liquidity when constructing thematic ETFs.
Also inside are the usual segments such as ETF of the Month (p.13), Education Corner (p.12), Fund Fights (p.14) and Expert Investors, where ETF Stream interviews fund selectors on the role of ETFs within their asset allocation (p.11).
Read the headlines below:
Leader: Nvidia’s rapid domination of theme and sector ETFs (p.36)
Thematic ETFs: Timing is everything (p.7)
ETF Buyers Club: A new dawn for biotech investments (p.16)
ETF Buyers Club: ETFs to capture building blocks of modern life (p.18)
The Patient Investor: The wisdom of ignorance (p.20)
How do thematic ETF issuers balance purity, diversification and liquidity? (p.24)
ARK Invest Europe faces challenge to win over fund selectors (p.28)
The case against a crypto allocation (p.32)
Beyond Beta: A ‘volatile’ situation (p.40)
Sponsored content from Fidelity International, JP Morgan Asset Management, MarketVector Indexes and STOXX:
Implications of AI for cloud computing companies (p.22)
Thematics could follow sectors in becoming a portfolio staple (p.26)
Targeting decarbonisation outcomes (p.30)
Roundtable: Crypto ETPs and innovation in the digital asset indexing space (p.44)
Roundtable: ETFs to address asset allocation challenges in a new market regime (p.48)
ETF Insider is only available to professional investors and members of the ETF industry in Europe. To access the full issue of ETF Insider, click here.
