Good Story, Bad Investment

Thematic ETFs often come with a good story attached but that doesn't mean they're sound investments, says Morningstar analyst Alex Bryan 

Alex Bryan 28 September, 2020 | 10:27AM

 Thematic ETFs

Thematic exchange-traded funds typically come with a good investment story, often seeking to capitalise on well-publicised long-term macro trends that transcend the business cycle. These include things like the increasing adoption of robotics and artificial intelligence, electric vehicles and genetic research, or demographic shifts.

But good stories are often the best thing these funds have going for them; they don’t necessarily make sound investments. Anyone considering investing in one should exercise caution and be sure to do their homework before buying.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Alex Bryan  is an ETF analyst with Morningstar.

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