Updated: Jan 28, 2021
ETFs are a great way to invest and gain exposure to thematics. That is, exposure to companies that all play to a certain theme or sector. This could be companies exposed more to ESG type values or that have heavy involvement in healthcare or technology. Investors could create these sorts of baskets of stocks themselves in their own portfolios but it takes time to build and requires hard work to maintain. ETFs offer a better way with a lower risk and more easy access to such exposure.
The ASX has a great set of videos on their YouTube site from market updates to CEO conferences. One of their videos is on the area of Thematic investing with ETFs and comes from their Investment Products team (Oran D'arcy representing) and BlackRock iShares (Blair Hannon). In this video Blair talks about thematic investing and how investors can do this with ETFs.
Some of the topics covered are as follows:
They talk about how investors can play themes that they believe in and the advantages that ETFs can offer investors such as through their transparency and strong liquidity.
The difference between long term and short term trends - the megatrends being more than just a quarter but more about being a quarter century kind of move
They also chat some themes around rapid urbanisation and smart cities, climate change and resource scarcity, emerging global wealth and other trends
The advantages of accessing a broader theme like healthcare through an ETF and the advantages of this rather than trying to pick the specific right play in that space
Check out these topics and the rest of their conversaation below: