Global X: Why Your Portfolio Should Go Thematic

March 22, 2017

An Unconstrained Approach
A thematic approach differs from traditional portfolio construction in that it breaks out from the gridlike method of asset allocation. According to a white paper from RBC, “Thematic investing ignores geographical boundaries, style biases and market capitalization, and it transects traditional sector classifications. This provides investors with a distinctive strategic advantage: The ability to look across all geographies to identify emergent and potentially rewarding investment trends.”6

Given thematic investing’s agnostic approach to geographies and sectors, it can have low correlations to other portfolio strategies, which can be particularly useful for investment managers seeking to diversify sources of growth.

ETFs & Thematic Investing
Many investors are already familiar with the inherent advantages of ETFs, including the typically lower costs of index-based investment strategies compared to actively managed funds, and the tax efficiency and transparency ETFs versus traditional mutual funds. Within the context of thematic investing, these advantages still play a large role.

An additional key benefit to using thematic ETFs is the ability to access dozens of companies around the world with a single trade. Traditionally, thematic investing has been limited to more sophisticated institutional investors due to the research required to pinpoint companies with high exposure to a theme and the need to access a variety of international markets for themes that are global in nature. Thematic ETFs track indexes that take care of the security selection part of the process, and can provide access to a broad set of companies around the world with exposure to a particular theme.

GLOBAL X THEMATIC ETFs

Category Ticker Fund
Technology SOCL Global X Social Media ETF
Technology FINX Global X FinTech Thematic ETF
Technology SNSR Global X Internet of Things Thematic ETF
Technology BOTZ Global X Robotics & Artificial Intelligence ETF
Technology LIT Global X Lithium & Battery Tech ETF
Resources COPX Global X Copper Miners ETF
Resources SOIL Global X Fertilizers/Potash ETF
Resources GOEX Global X Gold Explorers ETF
Resources SIL Global X Silver Miners ETF
Resources URA Global X Uranium ETF
Resources PAVE Global X U.S. Infrastructure Development ETF
People MILN Global X Millennials Thematic ETF
People LNGR Global X Longevity Thematic ETF
People BFIT Global X Health & Wellness Thematic ETF
Values CATH Global X S&P 500 Catholic Values ETF
Values KRMA Global X Conscious Companies ETF

 

Endnotes

  1. Thematic Investing
  2. UBS House View: 2016 and Beyond
  3. Planning for the Future Through Thematic Investing
  4. "The Thundering World," Merrill Lynch, 2016.
  5. From Indexes to Insights: The rise of Thematic Investing
  6. Global Megatrends: Capitalizing on Tomorrow’s Trends Today

 

Disclosures

Investing involves risk, including the possible loss of principal. In addition to the normal risks associated with investing, international investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Narrowly focused investments and investments focusing on a single country may be subject to higher volatility. There are additional risks associated with investing in base and precious metals as well as their respective mining industries. Investments in smaller companies typically exhibit higher volatility.

Carefully consider the Funds’ investment objectives, risk factors, charges, and expenses before investing. This and additional information can be found in the Funds’ summary or full prospectus, which may be obtained by calling 1-888-GX-FUND-1 (1.888.493.8631), or by visiting www.globalxfunds.com.

NASDAQ OMX Indexes, Solactive Indexes, S&P Indexes, FTSE Indexes, MSCI Indexes, INDXX, and EDHEC Risk Institute Asia Ltd. Indexes have been licensed by NASDAQ OMX, Solactive AG, Standard & Poors, FTSE, and MSCI respectively, for use by Global X Management Company, LLC. Global X Funds are not sponsored, endorsed, issued, sold, or promoted by NASDAQ OMX, Solactive AG, Standard & Poors, FTSE, MSCI, INDXX, or EDHEC, nor do these companies make any representations regarding the advisability of investing in the Global X Funds.

Global X Management Company, LLC serves as an advisor to the Global X Funds. The Funds are distributed by SEI Investments Distribution Co. (SIDCO, 1 Freedom Valley Drive, Oaks, PA, 19456), which is not affiliated with Global X Management Company, LLC.

Shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.

 

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