Should You Buy A Thematic ETF?

These products often come with a good story attached but that doesn't mean they're sound investments, says Morningstar analyst Alex Bryan 

Alex Bryan 7 October, 2020 | 1:15AM

 Thematic ETFs

Thematic exchange-traded funds typically come with a good investment story, often seeking to capitalise on well-publicised long-term macro trends that transcend the business cycle. These include things like the increasing adoption of robotics and artificial intelligence, electric vehicles and genetic research, or demographic shifts.

But good stories are often the best thing these funds have going for them; they don’t necessarily make sound investments. Anyone considering investing in one should exercise caution and be sure to do their homework before buying.

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About Author

Alex Bryan

Alex Bryan  Alex Bryan, CFA, is director of passive strategies for North America at Morningstar. Before assuming his current role in 2016, he spent four years as an analyst covering equity strategies. He holds an MBA with high honors from the University of Chicago Booth School of Business.

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