2022 – The Reckoning for Thematic ETFs?

Macros weighing on Thematic ETFs in 2022

With over 644 Thematic ETFs listed and over $261 Billion of combined assets, Thematic ETFs have exploded in popularity in the last few years. Thematic ETFs have redefined the way that investors can target up-and-coming sectors and trends and build portfolios that are highly tailored to their interests. But while Thematic ETFs are often based on an investment thesis of high growth, innovation and disruption, only a few have been delivering on their promise in 2022 as rising interest rates and a shift to Value stocks has made R&D more expensive, increased their financing costs and created more competition for flows. Of the 69 themes monitored by Trackinsight, only 5 have delivered a positive performance for the year.

5 themes clinging to "green" life 

• Energy Infrastructure: +11.8% YTD, $513 million flows, YTD. Example: Alerian Energy Infrastructure ETF (ENFR) +9.6% YTD
• Natural Resources: +10.9% YTD, 180 million flows YTD Example: IQ Global Resources ETF (GRES) +8.1% YTD
• Travel, Technology and Services: +9% YTD, 135 million flows YTD: Example: Defiance Airlines, Hotels and Cruise ETF (CRUZ) +9.7% YTD
• China Digitalization: +4.1% YTD, 106 million flows YTD Example: KraneShares CSI China Internet ETF (KWEB) +4.1% YTD
• Emerging Markets Infrastructure, +3%, 2.3 million of flows Example: iShares Emerging Markets Infrastructure ETF (EMIF) +5.8% YTD

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