COVID-19 crisis weighs on thematic ETFs

The Disruptive Technology category represents US$18 billion —73% of thematic ETF assets — and includes Connectivity, Digital Content, and Robotics. The People & Demographics category has a modest US$2.6 billion, and the Physical Environment category had US$4.2 billion.

“Within the disruptive technology category, there were both asset-growing and asset-declining mega-themes,” Rosenbluth said. While assets in connectivity-focused ETFs surged from US$3.6 billion to US$4.0 billion over the first quarter, robotic funds shrank from US$3.2 billion to US$2.4 billion.

Under the Connectivity mega-theme, he highlighted the Defiance Next Gen Connectivity (FIVG) and First Trust Indxx NextG ETF (NXTG) ETFs, both of which invest in companies that capitalize on a long-term trend toward 5G communications through research and development or commercialization of systems and materials that support the technology.

“The broad adoption of 5G technology is expected to transform work practices and daily life by providing faster speeds, better functionality, and lower latency,” Rosenbluth said.

The pressure on robotics funds, meanwhile, was felt particularly by the category’s two leading products. The Global X Robotics & Artificial Intelligence (BOTZ) ETF shriveled from US$1.5 billion to US$1.1 billion in assets as it sustained US$170 million in net outflows. The ROBO Global Robotics and Automation Index ETF (ROBO) was tossed out of the billionaire’s circle, going from US$1.3 billion to US$922 million in assets due partly to redemptions amounting to US$111 million.

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