Dear First Mates,
I hope you’re doing well. In recent years, I’ve become fascinated with thematic exchange-traded funds (ETFs). After launching my first model here at The WealthPlan LLC, I was excited to offer clients a unique way to invest in certain long-term trends or themes.
Today, I wanted to share an overview of some top thematic ETFs we’ve been using so you can understand why I’m optimistic about these investments.
To begin with, what is a thematic ETF?
Think of thematic ETFs as baskets of stocks all linked to a particular theme or trend. They provide targeted exposure to growing industries and technologies and can be a strategic addition to your investment portfolio. Interested in self-driving cars, clean energy, or artificial intelligence? There’s an ETF for that.
That said, here are five investment themes and some important research to back up those themes’ investment merit.
Our Top Thematic Ideas in 2023
1) Robotics
In its simplest terms, the autonomous tech and robotics industry fuels the growth and development of “intelligent” robots able to carry out tasks previously held by humans. This theme is expected to reach over $6 billion by 2033. Leading companies in the theme include Teradyne Inc., NVIDIA Corp, and Zebra Technologies Corp.
2) Genomics
Don’t remember much from high school biology? Yeah, me neither. Here’s a quick refresher on all things genomics. The genomics industry is projected to grow to $6 billion by 2028. Leading companies in the theme include Twist Bioscience Corp, CRISPR Therapeutics AG, & Recursion Pharmaceuticals Inc.
3) Clean energy
Advances in wind and solar technologies and legislation from the Biden administration are fueling rapid growth in the industry. Largely motivated by energy security rather than climate change, the clean energy sector could exceed investments of $2 trillion annually by 2030, an increase of 50% compared to 2023. Leading companies in the theme include First Solar Inc., Enphase Energy Inc., and & Iberdrola SA.
4) Electric vehicles (EVs)
Similarly, as part of the current administration’s efforts to speed up domestic adoption of EVs, the EV market has seen several catalysts in 2023. There’s an initiative to see a national network of 500,000 EV chargers and a push for EV sales to account for half of all new car sales by 2030. Furthermore, Goldman Sachs Research predicts EVs will make up about half of new car sales worldwide by 2035, up from 14% in 2022. Leading companies in the theme include Tesla Inc, NVIDIA Corp, & Qualcomm Inc.
5) Artificial intelligence (AI)
AI is all over the internet and is the topic everyone is currently discussing. Forecasts suggest the global artificial intelligence market could grow from $515.31 billion in 2023 to over $2 trillion by 2030. Leading companies in the theme include Tesla, NVIDIA, & Microsoft.
The leading companies issuing Thematic ETFs include GlobalX, ARK, Blackrock, & Tema. Many of these companies have documentation on the investment case for each particular fund/them.
If you have questions, would like to talk further, or are ready to implement some of these themes into your portfolio, give me a call or reply to this email. I’m happy to build you a custom lineup of thematic ETFs or implement our model that owns over 15 different themes.
Dave’s Picks
Kosher Money – Never Pay The First Bill! (how to beat outrageous medical bills)
Frank Sinatra singing Gangsta’s Paradise (track o’ the month – AI is insane)
Concentration in the Stock Market by Ben Carlson (great read discussing investment concentration)