Thematic ETFs: From Hype to Staying Power

Thematic ETFs have often been labeled as flashy and short-lived. But the latest data from Trackinsight’s Global ETF Survey 2025 suggests a turning point: while closures persist and fads fade, certain themes are proving resilient, investor conviction is deepening, and usage is evolving from tactical to strategic.

A Global Landscape in Flux

By early 2025, there were 473 thematic ETFs listed in the U.S. and 748 in Europe, with the global count climbing despite notable closures. U.S. thematic ETF assets jumped to $278 billion, bolstered by the launch of spot Bitcoin ETFs, which alone account for $120 billion. In Europe, assets grew to $140 billion, driven by performance in tech-heavy strategies like AI and digital infrastructure.

Asia-Pacific is catching up, with 25 new launches in 2024, even as net flows turned negative. Canada, meanwhile, is seeing more measured activity, with themes like AI & Big Data holding firm.

The Crypto Effect—and Beyond

In the U.S., crypto ETFs redefined thematic investing in 2024. Following SEC approval of spot Bitcoin products, flows into thematic crypto ETFs surged, turning a corner for the entire segment. But growth wasn’t limited to digital assets:

• Global Infrastructure saw $5.4B in inflows.
• AI & Big Data attracted $2B.
• Nuclear energy pulled in nearly $2B, reflecting a renewed focus on energy security and innovation.

At the same time, once-popular themes like clean energy, cannabis, and metaverse struggled amid poor returns and shifting narratives.

Survey Insights: Confidence Builds

Trackinsight’s investor survey shows a clear shift in how professionals view thematic ETFs:

• 55% plan to increase their exposure to thematic ETFs in the next 6 months.
• The top motivations? Diversification, strategic long-term bets, and high-conviction exposure.
• Most investors still keep allocation below 30% of their ETF portfolios, but the intent is changing—from short-term trades to multi-year theses.

Key selection criteria include:

• Risk-return profile
• Diversification vs. core holdings
• Fund size and liquidity

View the full survey results & charts here →

Winners and Losers in the Thematic Race

Top-performing themes in 2024 (U.S. and Europe):

• Cryptocurrency: +61.6% (U.S.), +106.5% (Europe)
• Blockchain, AI, Fintech, and Digital Infrastructure also posted strong gains.

Bottom-performing themes:

• Solar, Wind, and Hydrogen energy
• Cannabis, Psychedelics, and Strategic Metals

This divergence highlights a more mature market, where quality themes with real-world momentum are separating from hype.

Outlook: Education, Innovation, and Endurance

Issuers are adapting by educating investors, refining theme definitions, and improving product structure. Thematic ETFs are being repositioned not as one-off plays, but as satellite components that complement core holdings with targeted, often non-correlated exposure.

Emerging use cases include:

• Tactical allocation in model portfolios
• Sector rotation strategies
• Client engagement tools for next-gen investors

View the full survey results & charts here →

Conclusion: Themes That Endure

Thematic ETFs are evolving. While the shakeout of weaker products continues, the strongest themes are becoming staples of modern portfolios. As innovation, sustainability, and digital transformation reshape the global economy, thematic ETFs offer a unique lens—and investment vehicle—for capturing the future.

In 2025, the question isn’t whether thematic ETFs have staying power. It’s which ones do.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.