The risk-off that has characterized the equity markets is also felt on thematic investments with AUM falling for thematic ETFs, even if flows on themes such as Big Data, Health e Climate change. In the UCITS Thematic ETF report, Global X gives us an insight into what the flow on thematic ETFs offering an approach to take advantage of structural changes globally is offered. The goal of a thematic investment is to try to identify powerful trends at the macro level and consequently the companies that can potentially reap the greatest benefits from the materialization of these trends.
When it comes to thematic investments, the main features are:
1) long-term growth-oriented strategies.
2) it is not bound to specific geographic areas or sectors.
3) It is an investment that is often focused on technology and takes into consideration possible new consumer needs.
4) It takes into consideration related concepts that have an impact on our daily life.
The Global X classification system includes 3 main categories (Disruptive Technology, People & Demographics and Physical Environment) which are divided into mega-themes which in turn are divided into themes and their respective sub-themes.
Thematic ETF overview
At the end of April 2022 there were 102 thematic ETFs for a total of $ 34.3 billion in assets under management (AUM), down 9.2% from March 2022 and down 0.3% from the same month last year.
All mega-themes within the Disruptive Technology category saw a decrease in AUM, with FinTech posting the largest decline in AUM over the month. The Big Data megathema has seen a sharp rise in monthly flows.
As we can see from the graph below, the Asset Under Management (AUM) has decreased in all sectors from that of Big data to robotics but also in Fintech.
The mega-themes within ‘People and Demographics and Physical Environment’ saw a decrease in the AUM over the month, however the Climate and Change and Health megathems saw a sharp increase in monthly flows.
On a thematic level, it saw a decrease in AUM, with the cannabis theme that saw the biggest drop in AUM over the month.
Now let’s see which ETFs performed better and which YTD worse:
