Thematic ETFs to Hone in on Market Opportunities

Investors can utilize ETFs to track broad markets or focus on unique thematic concepts for targeted growth opportunities.

“What’s great about thematic ETFs: they go where people can really understand it. When you think about factor investing, smart beta, everybody wants to talk about the fundamentals that matter in your portfolio, but what’s often left out is that concept of growth,” Mike Akins, Senior Vice President and Director of ETFs for ALPS, said at the Inside ETFs 2018 conference.

“Great growth managers are going where the markets are going, and I think there’s a lot of opportunities now that we have the data and the technology to identify those trends, put them into a packaged vehicle – stock replacement vehicle, get diversification – all the good tax efficiencies, all that stuff – through a thematic process,” Akins added.

For example, ALPS Advisors recently launched the ALPS Disruptive Technologies ETF (Cboe: DTEC). DTEC tries to reflect the performance of the Indxx Disruptive Technologies Index, which identifies companies using disruptive technologies across ten thematic areas, including Healthcare Innovation, Internet of Things, Clean Energy and Smart Grid, Cloud Computing, Data and Analytics, FinTech, Robotics and Artificial Intelligence, Cybersecurity, 3D Printing, and Mobile Payment.