Thematic ETFs were all the rage until the foundational AI trade of the so-called “Magnificent 7” stole the spotlight. Are thematics set for a comeback in 2026 thanks to AI? Global X ETFs CEO Ryan O’Connor and ETF Action founding partner Mike Akins sit down with CNBC’s Dominic Chu on “ETF Edge” to discuss the range of thematic ETFs, how they've changed the ETF landscape and the next ETF themes to watch. ...

ETF Action founding partner Mike Akins says thematic ETFs could be headed for a comeback thanks to the explosive growth of AI. He digs into what's behind the revolution and why he thinks they could also replace sectors. Global X ETFS CEO Ryan O’Connor joins the conversation with CNBC's Dominic Chu. ...

Futures have been positive all morning. You see the S&P 500 due for a gain about 30 points. That's about 4/10en of 1%.The Nasdaq is really leading the way up almost 200. And in fact, I believe uh been eight straight uh Mondays for the NASDAQ that have been positive for for what that's worth. Joining us now, Sylvia Jablonsky, CEO and chief investment officer of Defiance ETF.Sylvia, good to see you this morning. I I I guess everyone kind of knows the the basic setup where, you know, strong years tend to end s ...

Market Imbalance & Diversification - The technology sector holds an all-time high of approximately 35% weight within the S&P 500 index, while defensive sectors (staples, healthcare, energy, and utilities) are at an all-time low of just 19% [3] - Investors are seeking diversification beyond the S&P 500 index due to increasing concentration, exploring options like small caps (Russell 2000 IWM ETF) and international investments for value [6][9] ETF Trends & Strategies - There's significant interest in income-generating products, particularly those utilizing derivatives, to meet the needs of investors, especially retirees [11][13] - Innovation in income strategies involves moving beyond traditional covered calls to more sophisticated approaches like selling call spreads and active management to unlock more upside [14][15] - Thematic ETFs, particularly those related to AI, are experiencing a resurgence, attracting attention and growth in the ETF market [19][20] Future Outlook - The leveraged ETF space (3x and 5x products) is gaining attention, raising questions about its potential impact on financial markets [16][17] - Healthcare sector is considered an interesting area for potential investment, offering both growth and value opportunities [17][18]

Core Insights - The current market is experiencing significant imbalances, particularly within the S&P 500, with the technology sector reaching a record weight of approximately 35%, while defensive sectors are at a historic low of 19% [3][4]. ETF Market Dynamics - There is a notable shift towards momentum investing, especially in technology and communication services, which may lead to a broadening out trade [4][5]. - Small-cap stocks, represented by the Russell 2000 ETF, have seen increased activity since April, indicating a potential shift in investor focus away from large-cap technology stocks [6]. Investment Strategies - Investors are seeking diversification beyond traditional index ETFs due to increased concentration in indices, leading to heightened interest in alternative investment strategies [9]. - There is a growing demand for income-generating products, particularly among retirees, with innovative strategies emerging in the derivative space to meet these needs [11][14]. Trends in ETF Offerings - The gold trade is gaining traction, with significant inflows into gold-related income products [10]. - Advanced income strategies, such as selling call spreads instead of traditional covered calls, are becoming more popular, allowing for greater upside potential [15]. Future Outlook - The leverage space in ETFs is expected to attract attention, with products aiming for 3x and 5x returns being developed [16]. - The healthcare sector is viewed as a potential area for growth, especially given the recent outflows from this space [17]. - Thematic ETFs, particularly those related to AI, are anticipated to regain popularity, reflecting a resurgence in interest in innovative investment themes [19][20].

Core Insights - Thematic ETFs have gained traction, particularly the VanEck Video Gaming and eSports ETF (ESPO), which has seen significant growth in assets under management (AUM) this year [1][3][5] Group 1: ETF Overview - The VanEck Video Gaming and eSports ETF (ESPO) launched prior to the 2021 ETF rule and charges 56 basis points, tracking the MVIS Global Video Gaming & eSports index [2] - The index consists of fewer than 30 companies, focusing on subsectors like gaming hardware and software, providing concentrated exposure [2] Group 2: Performance Metrics - ESPO's AUM has increased from approximately $279 million to $496 million year-to-date, with about $70 million in net inflows, driven by price appreciation [3] - The ETF has delivered a year-to-date return of 45.5%, outperforming its category and segment averages [4] Group 3: Notable Holdings - AppLovin Corp (APP), the largest holding in ESPO, has achieved a 100% return year-to-date, with a return on equity of 259% and a year-over-year quarterly revenue growth of 77% [4] - Other significant holdings include Nintendo and Unity Software, enhancing the ETF's focus on gaming software and development [4]

ETF Market Trends - The ETF market is showing a stronger division between institutional and individual investors, raising concerns [1] - Approximately 64% of the entire ETF market can be traced back to 13F filings, indicating institutional ownership [2] - Single stock ETFs have over $30 billion, almost $40 billion in assets, with sub 10% institutional ownership [3] - Niche thematic ETFs, like those popular during 2020-2021, often have low institutional ownership, driven by retail investors [4][5] - Flows into niche strategies, especially in thematic and innovative spaces, are showing signs of approaching 2020-2021 levels [5] Single Stock ETFs and Thematic ETFs - Single stock ETFs now amount to $40 billion, including leveraged products and covered call/synthetic income strategies [6] - Synthetic calls on single stocks are almost entirely (99%) owned by retail investors, with no institutional allocation [7] - While thematic ETFs can be great portfolio allocation tools, significant inflows into these products can be a contrarian signal of market overheating [8][9] Gold ETFs - Traditionally, institutional and retail flows into gold ETFs have been about a 50/50 split [10] - Institutions are increasingly looking at strategically allocating 3% to 5% of portfolios to gold as a cost-effective hedge against drawdowns [11][12] - Gold ETFs have seen approximately $40 billion flow in worldwide through the first half of the year, with an additional $4 billion for July and August [12] - Central banks have shown record or near-record flows into gold over the last three years, continuing to drive gold performance [14][15]

Industry Overview - The telecom industry has experienced a positive year, with a rise of approximately 13% and 30% on a yearly basis, although this performance remains below that of the broader S&P 500 [1] Performance Analysis - Over a 5-year period, the telecom industry's returns have been analyzed, indicating a need for further evaluation against historical performance metrics [1]

Todd, I'll go to you for this one first. Some argue that the AI trade really falls into more of that thematic bucket. There's a wide array of thematic ETFs out there for just about anything.If you can think it, there's probably an ETF for it. But how much of one's portfolio should be allocated to themes. You mentioned just how much in the beginning some advisers are allocating to the thematic trade, but is there any kind of a consensus building that you can see about whether that consensus is either underpl ...