As investors grow more familiar with ETFs, many are using targeted ETF strategies to gain focused exposure to specific market themes and potential opportunity sets.
“Exchange traded funds are constantly evolving, trying to do something new and something fresh,” Taylor Ames, Vice President of Product Strategies for ALPS, said at the 2018 Morningstar Investment Conference. “You’re starting to see the research and popularity with thematic investing. Smart beta and factor investing is something really becoming established within the industry. But now, what you’re starting to see is investors wanting to invest in specific themes – things they are convicted about, things they want to be invested in.”
Ames singled out the ESG or environmental, social and governance theme that is growing in popularity as investors look for ways to gain exposure to the markets through a socially conscientious manner, investing in things that they personally believe in without sacrificing returns.