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At the VettaFi Asset Allocation Summit in April, advisors told VettaFi they are increasingly interested in thematic exchange-traded funds (ETFs). More than a third of attendee respondents (35%) said they expect to add to thematic ETFs in the next three months, compared with 31% who selected fixed income and 27% who selected commodity ETFs.
Christian Magoon, founder and CEO of Amplify ETFs, said the modern investment landscape has outgrown traditional sector-based diversification. In a separate April virtual event focused on the evolution of thematic investing, Magoon emphasized that major disruptions often cut across multiple industries, reducing the effectiveness of relying solely on conventional sector groupings for growth-oriented investors.
Magoon said a single thematic thesis typically requires exposure to four or five traditional sectors. He cited the Amplify Lithium & Battery Technology ETF (BATT) as an example, noting it includes metals and mining companies, automotive companies, battery technology, chip companies, and manufacturers of battery storage equipment.
He described thematic ETFs as a way to capture timely trends with longer durations that a single-sector fund may miss. Magoon also characterized thematic allocations as a satellite complement to a core portfolio. While a traditional 60-40 allocation may lack “sizzle,” he said adding targeted thematic growth can provide the alpha many advisors seek. For most investors, he suggested three to four targeted themes are sufficient for the growth sleeve.
As technology and policy shift, Magoon said the range of popular themes continues to expand, creating new synergies. He pointed to the ROBO Global Artificial Intelligence ETF (THNQ) as a vehicle for capturing the growth of artificial intelligence, with investor interest moving beyond foundational large language models toward the physical infrastructure needed for scale.
He linked that infrastructure demand to energy requirements, saying the computational power driving the AI buildout has created unprecedented demand for reliable, carbon-free energy. In that context, he highlighted the Range Nuclear Renaissance ETF (NUKZ), noting it captures the nuclear value chain and provides exposure to global companies involved in the nuclear renaissance, from uranium enrichment to engineering firms and utilities.
Magoon also referenced the Procure Space ETF (UFO) as a way to play the commercial space race. He said the satellite industry and orbital services are expanding, and that UFO offers diversified exposure to companies largely split between industrials and communications services.
Rather than trying to identify a single “winner” in complex regulatory and technical environments, Magoon advocated buying a professionally selected portfolio through an index research group such as VettaFi. He said this approach provides access to diversification and research in a single position.
Under Magoon’s thematic philosophy, investors can use an ETF wrapper to own an entire investment thesis and position their portfolios for structural shifts over time.
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