Specializing in retirement planning and personalized investment management.

Thematic Investing

What is it?

A lot of funds focus on asset classes like Large Growth Stocks, Small Value Stocks, International Stocks, High Yield Bonds, etc. Some funds focus on sectors like utilities, consumer durables, or healthcare. Thematic funds are similar to sector funds because they offer targeted exposure to certain areas of the market. Instead of a particular sector though, their focus revolves around certain trends or themes.

Thematic funds often cut across asset classes and sectors to incorporate their themes. An example of this is the iShares Global Clean Energy ETF (ICLN), which is an alternative energy thematic fund. It is global in nature (both US and international), holds a similar percentage of large, mid and small cap companies, and has exposure to the utilities, technology, energy, and industrial sectors.  So ICLN is diversified across asset classes and sectors, but yet it is very narrow in its focus (theme).

Thematic investing is one of our most popular portfolio customization options.


Thematic investment funds enable people to invest in long-term trends and themes they are interested in. They are more concentrated, so an investor can really dial in on the exposure he or she wants.

Unlike factor investing, which places more emphasis on historical analysis and trends, thematic investing is a forward-looking approach. It seeks to capitalize on ever-evolving social, economic, and demographics trends in our world. In other words, thematic investing is about the future.

While we consider all equity (stock) investments to be long-term, sometimes investors can be impatient.  We find that investors are more understanding of the long-term nature of investing in themes.  They understand that blockchain technology, the cannabis industry, and autonomous vehicles don’t just happen overnight.  Any mental edge an investor can give themselves to think more long-term, especially in our instant gratification society, we encourage.  After all, as the saying goes, “time in the market is better than timing the market”.


The main disadvantage of thematic investing is that the theme simply may not work out as expected. Concentration could be considered a disadvantage, but really, concentration is only viewed unfavorably when an investment does not pan out. A second disadvantage is cost. Most thematic investments have higher expense ratios than traditional index funds.


Thematic investing may not be for everyone, but it does provide an opportunity for people to invest in certain trends and themes that they believe in. Choice is a good thing. For more information about thematic investing, check out this great primer by Global X called Investing in Tomorrow.

A few words of caution – some of these themes have seen enormous returns.  Do not select a theme or fund just based on past performance.  Make sure you understand the theme, and how a particular fund is covering the theme.  Also, do not just invest in thematic funds.  They represent just small segments of the overall market.  Broad diversification is very important and should still be the core (majority) of your portfolio.  Thematic investing is often part of an “explore” strategy where you target various areas of the market that exhibits more growth potential.

Thematic Ideas

We offer up a variety of thematic investing ideas on the following pages.  Note - we do not include ESG as a theme as it is a whole other category.

Technology: Broad-Based and Communications: Broad-Based are really sectors and not themes. If you are new to this type of investing, or do not desire the concentration of thematic funds, consider a more broad-based approach. Another option would be Internet: Broad-Based, which is narrower in scope than the Technology and Communications sectors, but still wide-ranging since the internet can encompass many things.

Multi-Theme is a client favorite. Like the name suggests, it combines multiple innovative themes into one fund.

For those who prefer a narrower focus, we have lists of funds for specific themes. These include:

5G Technology

Alternative Energy

Cloud Computing



FinTech & Blockchain

Gaming & eSports

Health Care: BioTech & Genomics

Health Care: Misc. Themes



Robotics & Artificial Intelligence

Space Exploration

Technology Hardware (Semiconductors & Batteries)

Technology Software

Transportation Tech

Misc. Themes & Tech