Biggest potential ETF theme - Innovation

What does innovation encompass?

Innovation, as an investment theme, is exceptionally broad, especially when taking account ongoing technological developments. Themes surround the future of industries, the future of health, and the future consumer. Some of the largest themes for innovation include:

Technology: Adoption of artificial intelligence, next-generation internet, the metaverse, virtual reality, etc.

Healthcare: Ground-breaking healthcare advancements to cure and prevent physical and mental ailments

Clean Energy: The transition away from fossil fuels and the technology required to bridge the gap from the growing demand for energy globally and a shifting of the energy supply stack

Financials: Fin-tech development, blockchain and the potential for decentralized currencies

There are also global themes that investors may wish to gain exposure to, for example:

• Technological breakthroughs
• Changing demographics
• Greater urbanization
• Climate change
• Growing wealth of developing economies

Innovation ETFs: Accessing the investment opportunity

Spotting trends - and capitalizing on them - is what investing is all about. Getting ahead of large and secular trends globally is an effective way to not only grow capital but protect it from being invested in dying industries or technologies. For this reason, it is very important to be aware of different budding technologies and trends.

ETFs offer investors a simple and relatively cost-effective way to access the ever-growing array of themes in the innovation space, as well as providing the transparency, liquidity and diversification benefits inherent in the fund structure. These themes can be easily screened by using ETF Central’s ETF Screener (click here).

Examples of innovation ETFs

As mentioned above, while there are a plethora of different options available today, it is essential that investors understand the significantly higher levels of risk associated with emerging themes and undertake the necessary research to identify which trends have viability in the longer term and whether the investment is right for their personal circumstances.

Some examples of innovation ETFs are as follows:

ARKK – ARKK ARK INNOVATION ETF

• AUM: $7.5B
• 1mo Performance: -10.9%
• 1mo Flows: +$105MM

HTEC – Robo Global Healthcare Technology and Innovation ETF

• AUM: $96MM
• 1mo Performance: -15.7%
• 1mo Flows: -$4MM

TMAT – Main Thematic Innovation ETF

• AUM: $57MM
• 1mo Performance: -12.6%
• 1mo Flows: +$856K
• Data for this article is as of September 28, 2022.

Please note this article is for information purposes only and does not constitute investment advice.