Thematic ETFs_1024 x 768

Thematic and diversified investment via ETFs

ETFs

Saxo Group

Summary:  ETFs offer an way to get exposure to a trading theme, geographical region or other submarkets through a single instrument. Below we demonstrate a fraction of the possibilities to focus or diversify your portfolio with ETFs.


ETFs are typically covering either specific asset classes, geographical regions, or investment themes, and the latter has really gained interest during the past years. As mentioned in this article, this typically comes at a low cost, compared to the cost of acquiring each of the instruments in the ETF individually.

Multiple providers are offering ETFs, such as Amundi, Ossiam, Invesco, iShares, Xtrackers, HSBC, Lyxor and WisdomTree. Below is an example of 10 thematic ETFs and 10 ETFs with different geographical exposure (some of them with specific focus on ESG). They have been selected only for illustrative purposes due to their different themes and should not be considered as any trade considerations. Only UCITS ETFs are shown, as these typically have a KIID document, meaning that they do not have the same trade restrictions as some of the larger US ETFs which cannot be traded in some jurisdictions, unless you have status as being a professional trader.

Examples of thematic ETFs with a variety of trading themes:

  • INFR:xmil - iShares Global Infrastructure UCITS ETF
  • INRG:xlon - iShares Global Clean Energy UCITS ETF 
  • WCBR:xmil - WisdomTree Cybersecurity UCITS ETF 
  • FSKY:xlon - First Trust Cloud Computing UCITS ETF 
  • FOOD:xmil - Rize Sustainable Future of Food UCITS ETF 
  • HEAL:xlon - iShares Healthcare Innovation UCITS ETF 
  • RBOT:xlon - iShares Automation & Robotics UCITS ETF 
  • TRVL:xmil - Lyxor STOXX Europe 600 Travel & Leisure UCITS ETF 
  • ESP0:xetr - Vaneck Vectors Video Gaming & eSports UCITS ETF 
  • LERN:xmil - Rize Education Tech & Digital Learning UCITS ETF 

Examples of ETFs with different geographical exposure:

  • XZW0:xetr - Xtrackers MSCI World ESG UCITS ETF
  • XZEU:xetr - Xtrackers MSCI Europe ESG UCITS ETF
  • SGAS:xetr - iShares MSCI USA ESG Screened UCITS ETF
  • SGAJ:xetr - iShares MSCI Japan ESG Screened UCITS ETF
  • ICHN:xams - iShares MSCI China UCITS ETF
  • RUS:xpar - Lyxor MSCI Russia UCITS ETF
  • AEEM:xpar - Amundi MSCI Emerging Markets UCITS ETF
  • INR:xpar - Lyxor MSCI India UCITS ETF
  • IRSA:xlon - iShares MSCI South Africa UCITS ETF
  • IBC6:xetr - iShares MSCI Australia UCITS ETF

What to look out for when trading thematic ETFs?

Note that new ETFs in some time after their launch may have relatively low liquidity compared to established ETFs, so keep an eye out when trading those with a relatively large bid-ask spread. Read more on ETF liquidity here.

Some of the thematic ETFs are created with companies which are mostly is pure-plays within the theme, i.e. where a large parts of the company’s revenue is exposed to the theme. Other ETFs include companies if only a minor part of their revenue is associated with the ETF theme, e.g. for typical cloud computing ETFs which contain companies like Amazon, Alphabet etc. So the price movements in the ETF may be affected significantly by events which are not related to the overall ETF theme.

Disclaimer

The Saxo Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-sg/legal/disclaimer/saxo-disclaimer)

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Saxo Markets
Most of our staff in Singapore are working from home to help limit the spread of the coronavirus. We remain at your service on the details below. Thank you for your understanding.

Contact Saxo

Select region

Singapore
Singapore

Saxo Capital Markets Pte Ltd ('Saxo Markets') is a company authorised and regulated by the Monetary Authority of Singapore (MAS) [Co. Reg. No.: 200601141M ] and is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms & Risk Warning to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products such as Margin FX products may result in your losses exceeding your initial deposits. Saxo Markets does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Markets does not take into account an individual’s needs, objectives or financial situation.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-sg/about-us/awards.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website are not intended for residents of the United States, Malaysia and Japan. Please click here to view our full disclaimer.

This advertisement has not been reviewed by the Monetary Authority of Singapore.