Variations on some topics: investors flock to the ETFs you’ve heard so much about

Investor interest in the exchange-traded thematic funds skyrocketed in the second quarter, according to a report released Monday.

Thematic ETFs are funds that identify “powerful and disruptive macro-level trends and underlying investments that will benefit from the materialization of those trends,” wrote analysts at Global X, a thematic issuer of ETFs.

More specifically, thematic investing involves a strategy focused on long-term growth and is “unrestricted by arbitrary geographic and sectoral definitions.” Global X also notes that this strategy is known for its “related concepts”: the sets of ideas that ETFs have perhaps become best known for, such as the WFH “working from home” fund,
profiled by MarketWatch in June.

ETF-themed assets increased 65% from Q1 to Q2, according to Global X’s analysis, even as the number of funds increased only slightly, to 129 from 125.

Global X classifies thematic ETFs into three categories: disruptive technology, which includes subtopics such as fintech and digital content; people and demographics, covering ideas like millennial millennial shopping patterns,
+ 0.53%
and the economy of the concert; and physical environment, which encompasses climate change and sustainability issues.

Related:This ETF takes a “conscious capitalism” approach

Assets in the disruptive technology subcategory outshine the other two, and are getting bigger and bigger: They jumped more than 70% from the first quarter to the second, reaching more than $ 31 billion. Some of the giants of the ETF ecosphere are in this category, including the ARK Innovation ETF ARKK,
+ 0.31%,
The flagship fund of the company founded by Cathie Wood.

ETF thematic assets under management, Global X source

The amount of money invested in the demographics and people group increased 87%, but started from a much lower base.

It is important to note that Global X eliminates ETFs that are classified as “ESG” focused, for the environment, society or governance, from its general thematic definition, so the physical environment category does not include such funds .

After the coronavirus crisis, some predictable topics attracted the most investor interest: Cloud Computing and Healthcare Innovation saw the largest relative and absolute increases, Global X wrote.

Related:Investors are making big ‘BETZ’ on this online sports and gaming ETF