From Morningstar: 2024-04-18 11:46:00

Thematic funds are riskier and less diversified than standard equity funds, with their performance fluctuating based on trending topics. Funds focusing on AI have outperformed recently, but past trends like autonomous driving and clean energy lagged amid rising interest rates. Morningstar emphasizes low fees as a key factor in assessing thematic funds, with exchange-traded funds offering a cost advantage over open-ended ones. Despite lower fees, passive thematic funds have outperformed actively managed ones, a trend that may continue as more actively managed thematic ETFs enter the market. Several thematic ETFs, such as L&G Artificial Intelligence and Rize Cybersecurity Data Privacy, have earned Gold ratings from Morningstar for their strong performance and low fees. Additionally, funds like Lyxor MSCI Millennials ESG Filtered and iShares Electric Vehicles and Driving Technology have also received recognition for their stellar performance and low management costs. Conversely, Rize Sustainable Future of Food and L&G Clean Energy ETF have struggled in the past year, but their management teams and parent organizations have received positive ratings from Morningstar.



Read more at Morningstar: Six Gold-Rated Thematic ETFs | Morningstar