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Investors today are looking for more than average market returns — they’re seeking opportunities to invest in businesses and industries that will shape the future. Thematic investing offers a way to align your portfolio with long-term global trends, from artificial intelligence to clean energy.
The thematic ETF universe has expanded rapidly over the past decade. As of May 2026, there are 393 thematic ETFs listed in US markets, collectively managing more than $256 billion in assets.(1)
But how does thematic investing work, and is it the right fit for your portfolio?
What is thematic investing?
Thematic investing is a strategy that targets long-term structural trends rather than specific sectors, countries or companies. It allows investors to capitalize on themes like technological innovation, demographic shifts and environmental sustainability.(2)
By identifying and investing in transformative trends, thematic investing can target the sectors and industries poised for growth over decades. The strategy is particularly useful for investors looking to align their portfolios with personal beliefs — such as environmental sustainability or ethical innovation — or capitalize on structural changes in the global economy.
Unlike traditional stock picking, thematic investing emphasizes a broad, forward-looking approach. It also differs from sector investing, which concentrates on one industry, by investing across multiple sectors that contribute to a larger overarching theme.(2)
For example, a thematic fund focused on AI could include companies from technology, healthcare and automotive sectors that all leverage AI to drive innovation. This cross-industry approach allows investors to diversify while staying focused on high-potential themes.
How does thematic investing work?
Thematic investing works by identifying broad, impactful trends expected to shape the global economy over the long term. Investors select themes that align with these trends — such as AI, clean energy or cybersecurity — and invest in a diversified portfolio of companies or assets tied to those themes.(2)
The process typically involves investing in exchange-traded funds (ETFs) or mutual funds built around specific themes. These funds provide exposure to a range of companies operating within the theme, reducing the risk of individual stock picking while letting investors benefit from the collective performance of a thematic portfolio.
Thematic investing is best suited for long-term strategies, since many trends take years or decades to fully develop. Investors should be prepared for short-term volatility and ensure they believe in the long-term viability of the themes they pick. Because thematic investing often cuts across multiple stock sectors and geographies, it provides broader exposure to global shifts than traditional sector or country-focused strategies.
Popular thematic investing themes
Thematic investing spans a wide range of global trends, from cutting-edge technology to sustainability and social change. Below are some of the most prominent themes driving thematic fund flows today.
Artificial intelligence
Bloomberg Intelligence projects generative AI will grow from $45 billion in 2023 to $1.3 trillion by 2032.(3) Companies leading in AI development span chip makers, cloud infrastructure providers and AI software firms. Common holdings in AI-focused funds include NVIDIA (NVDA), Microsoft (MSFT), Alphabet (GOOGL) and Palantir Technologies (PLTR).
Clean energy
Renewables reached 34% of global electricity generation in 2025, up from 32% in 2024 and roughly 23% a decade earlier, with solar PV recording its largest-ever annual generation increase, according to the International Energy Agency.(4) The IEA forecasts renewables and nuclear combined will provide around half of global electricity by 2030.(4) Companies developing or supporting clean energy infrastructure include First Solar (FSLR), NextEra Energy (NEE) and Enphase Energy (ENPH).
This theme covers companies developing breakthrough therapies, advanced medical devices and new technologies like telemedicine and gene therapy. Notable holdings in healthcare innovation funds include Eli Lilly (LLY) for its GLP-1 obesity and diabetes drug franchise, Vertex Pharmaceuticals (VRTX) for gene therapy and Intuitive Surgical (ISRG) for robotic-assisted surgery.
Robotics and automation
The rise of robotics is reshaping industries from manufacturing to logistics to healthcare. The Global X Robotics & Artificial Intelligence ETF charges a 0.68% expense ratio and provides exposure across industrial robotics, unmanned vehicles and humanoid technology.(6) Individual company holdings span robotics stocks like Intuitive Surgical (ISRG), Symbotic (SYM) and Rockwell Automation (ROK).
Fintech
Fintech is reshaping how financial services are delivered, with innovations in mobile payments, blockchain and peer-to-peer lending. Notable holdings include Block (XYZ), PayPal (PYPL) and Visa (V).
Sustainable agriculture
Sustainable agriculture focuses on innovations in food production that meet global demand while reducing environmental impact, including precision farming, regenerative agriculture and alternative proteins. The US Environmental Protection Agency documents how climate change is increasingly pressuring agricultural systems through extreme weather, water scarcity and shifting growing seasons.(7) Companies leading the transformation include John Deere (DE) in precision farming equipment, Corteva (CTVA) in seeds and crop protection and CF Industries (CF) in low-carbon fertilizer.
Blockchain and cryptocurrency
Blockchain technology and cryptocurrency are transforming industries from finance to supply chain to data security. Investors can gain exposure through companies leveraging blockchain technology or those directly involved in cryptocurrency, such as Coinbase (COIN), Riot Platforms (RIOT) and Marathon Digital Holdings (MARA). The decentralized finance (DeFi) movement is also part of this broader theme.
5G and next-generation connectivity
Global 5G mobile connections surpassed 2 billion by the end of 2024, with the GSMA projecting 5G will account for 57% of all mobile connections by 2030.(11) Companies positioned in this space include Qualcomm (QCOM) in 5G chipsets, Ericsson (ERIC) in network equipment and Verizon (VZ) in US wireless infrastructure.
Where to access thematic investing
Many brokers and platforms now offer thematic investing options, from curated theme baskets to specialist thematic ETFs.
Charles Schwab Investing Themes
Charles Schwab offers Schwab Investing Themes, which provides access to more than 40 themes — each containing up to 25 research-backed stocks that clients can customize before placing a trade. Themes include artificial intelligence, renewable energy, robotics, cybersecurity and the space economy. There are no fees to access the platform, and the minimum trade amount is $250.(8)
Unlike a thematic ETF, Schwab Investing Themes lets investors hold the underlying stocks directly and adjust the weighting before trading.
Fidelity Thematic Investing
Fidelity Investments offers a range of thematic ETFs and mutual funds. Specific Fidelity thematic ETFs include the Fidelity Disruptive Technology ETF and the Fidelity Disruptive Communications ETF, which provide exposure to companies driving change in technology and communications respectively.(9)
Fidelity also provides research and outlook reports that contextualize each theme.
E*TRADE Thematic Investing
E*TRADE from Morgan Stanley provides access to thematic ETFs and mutual funds across themes including AI, clean energy and healthcare innovation. The platform integrates with E*TRADE’s broader research tools, letting investors monitor thematic positions alongside other holdings.
Public
Public is a commission-free investing platform that offers thematic investing through two distinct features. Curated Themes group fractional stocks around specific ideas — such as AI companies or green power — and can be accessed through the platform’s Investment Plans with $1 minimums. The platform also offers Generated Assets, an AI-driven tool launched in May 2025 that turns plain-language prompts into custom investable equity indexes, with a 0.49% annual management fee.(10)
Pros and cons of thematic investing
Pros
Long-term growth potential. Thematic investing lets you capitalize on multi-decade trends like AI and clean energy as they evolve.
Diversification across sectors. Unlike sector-based investing, thematic funds typically include companies from multiple industries tied to the theme.
Alignment with personal values. You can align your portfolio with what you believe will matter most over the long term, whether that's clean energy, healthcare innovation or another theme.
Wide range of access points. Thematic exposure is available through ETFs, mutual funds, custom stock baskets and specialist platforms.
Cons
Higher volatility. Many themes — especially emerging ones — can swing significantly over short periods.
Concentration risk. Thematic funds can be concentrated in a small number of companies or sectors, which adds risk if the underlying theme stalls.
Higher fees than broad index funds. Many thematic ETFs charge expense ratios of 0.50% to 0.75% — meaningfully higher than the ~0.03% on broad index ETFs.
Long time horizon needed. Themes can take years to fully play out, so this approach isn't well-suited for investors looking for quick returns.
Who should consider thematic investing?
Thematic investing is generally best suited for investors who:
Have a long time horizon. Themes can take years or decades to fully develop.
Already have core diversified holdings. Thematic positions work best as a complement to a broadly diversified portfolio, not as a replacement.
Believe in specific structural trends. The strategy makes most sense when you have conviction about a long-term shift.
Can tolerate volatility. Theme-based portfolios can move sharply with sentiment, regulation or technological setbacks.
It tends to be a less suitable fit for investors who need their money in the short term, prioritize stable income or want exposure that closely tracks the broader market.
Thematic investing offers a way to align your portfolio with the structural trends you believe will shape the global economy over the coming decades. It can be a useful complement to a diversified core portfolio, but it works best with a long time horizon and a tolerance for volatility along the way.
Whether you access themes through a curated stock basket, a thematic ETF or a specialist platform, the right approach depends on how hands-on you want to be and how much conviction you have in specific themes. If you’re ready to get started, compare brokerage accounts to find one that offers the type of thematic access that fits your strategy.
Frequently asked questions
Sector investing targets a specific industry like technology or healthcare, concentrating investments in companies within that sector. Thematic investing cuts across sectors, investing in companies tied to a particular trend — such as artificial intelligence or climate change — which may span multiple industries and regions.
Impact investing focuses on generating measurable social or environmental benefits alongside financial returns, such as investing in clean energy projects or social enterprises. Thematic investing centers on broad economic trends like technological innovation or demographic shifts, without necessarily prioritizing specific social or environmental outcomes.
Thematic investing can carry higher volatility than broadly diversified portfolios because emerging themes may take years to play out and can be derailed by regulation, technological shifts or shifts in consumer behavior. Concentration risk is also a factor — thematic funds may hold a small number of large positions, which can amplify losses if the theme stalls.
There's no single right answer, but most financial advisors suggest keeping thematic positions as a complement to — rather than the foundation of — a diversified core portfolio. A common rule of thumb is to limit any single thematic position to a small percentage of your overall portfolio, in line with your risk tolerance and time horizon.
Yes. Thematic ETFs typically charge expense ratios between 0.50% and 0.75%, while broad market index ETFs can charge as little as 0.03%. The higher cost reflects the more specialized research and active rebalancing that thematic funds often involve.
Shane's career started with the US Department of Defense where he performed research for 8 years. He then studied philosophy and became fascinated by the ways in which technology and finance can consolidate to impact the world's socio-economic order. To date, he has written hundreds of articles with various insights into digital assets, trading, investing, and the ways in which technology can be used to further optimize the stock trading and settlement processes. His work has been featured in Yahoo Finance, Nasdaq, Bitcoin Magazine, Investing.com, Tokenist, and others.
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