ETF Focus: Are thematic ETFs gimmicks or smart strategic plays?

It has become something of a joke on Wall Street: if the industry exists, there is an ETF for it.

Fund issuers have been looking for ways to tap into the white-hot market for exchange-traded funds, one of the fastest-growing vehicles in the financial industry, but with major asset classes and regions already dominated by multibillion-dollar funds from major asset managers, new players are hoping to make a name for themselves by engineering niche ETFs.

As a result, the market has been flooded by new “thematic” ETFs, which track a narrow sliver of the equity market, focusing on a specific subsector of a broader industry.

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