Sektory a témata
Thematic ETFs: Temptation and Trap. When Do They Make Sense and When Don't They?
Key takeaways
- Thematic ETFs are concentrated — a few companies make up a large part of the fund.
- Higher TER than broad-market funds gradually erodes returns.
- Entering at the peak of media coverage means paying for overvaluation.
- Thematic ETFs make sense as a small satellite with a clearly defined investment horizon.
- A benchmark comparison against a broad-market ETF is essential before every purchase.
Thematic ETFs cluster companies around a single story — artificial intelligence, clean water, cybersecurity, robotics. They are appealing precisely because they are so easy to understand. But that very appeal is what can make them dangerous.
What makes a thematic ETF different
Unlike sectoral or broad-market funds, thematic ETFs:
- track proprietary indices designed by the fund provider — without a long historical track record,
- typically carry a higher TER (0.40–0.75% per year vs. 0.07–0.20% for index ETFs),
- are heavily concentrated — the top ten positions can account for 50–70% of the fund,
- are most commonly launched after a topic has been popularised by the media — i.e. when valuations tend to be highest.
The trap called "the trend is obvious"
The problem with thematic ETFs is not that the trend might be false. Digitalisation, green energy or population ageing are real forces. The problem is that the prices of shares in the index reflect expectations, not actual developments. If everyone knows that AI is the future, AI shares are expensive before the future arrives.
When a thematic ETF does make sense
There are situations where a thematic ETF has a place:
- As a small satellite position (5–10% of the portfolio) with a clearly defined investment thesis.
- If you want to target a region or sector that a broad-market ETF underweights — for example emerging-market infrastructure.
- If the TER is reasonable and the fund has a sufficient track record and assets under management.
But as the core of a portfolio or a "save the day" bet? That is where thematic ETFs become very risky. Learn more about how to work with megatrends in general, or how to choose the right ETF for your portfolio.
How to evaluate a thematic ETF
Before buying, check: TER, AUM (fund assets), the history of the index, the number of holdings and top-10 concentration. Then ask yourself: is the selection of companies in the index genuinely thematically pure, or are titles included just to make the fund look fuller?
FAQ
Are thematic ETFs suitable for beginners?
Not really as a foundation. For beginners, broad-market index ETFs with a low TER and diversification across all sectors are more appropriate. Thematic ETFs are interesting as a small supplement once you understand the basics.
How do I recognise a quality thematic ETF?
Check TER, assets under management (AUM), index history and top-10 concentration. Then compare performance over 3–5 years against a global broad-market benchmark. If the fund has no history, verify the index performance through backtesting.
Why are thematic ETFs most often launched in waves?
Because they are created when investor interest is at its highest — after a topic has received heavy media attention. That also means the relevant shares tend to be overvalued at launch and forecasts overstated.