These Gen Z-Approved Investment Funds Are Having a Moment—What Investors Should Know
Themed ETFs for industries like AI and energy are coming back into favor and are especially popular with Gen Z investors. Here are a few tips to keep in mind.
TL;DR
- Diversification is a key principle for a healthy investment portfolio, protecting against losses in single companies or sectors.
- Themed ETFs focus on specific industries (e.g., AI, space exploration) or themes (e.g., natural resources, infrastructure).
- Investors poured billions into themed ETFs in 2020-2021, retreated, and have since returned, with AI-themed ETFs leading inflows.
- Gen Z investors show a strong interest in thematic ETFs, being more comfortable with ETFs in general and willing to take on calculated risk.
- Tips for investing in thematic ETFs include diversifying across themes, ensuring they complement your existing portfolio by holding different stocks, and conducting thorough research on the ETF provider, fees, and management style.