Artificial intelligence is driving a surge of assets into thematic exchange-traded funds, but experts warn of the risks as tech stocks lead the market lower. Thematic ETFs can be volatile, delivering strong gains when a theme is in favor, but momentum may fade quickly.
ETFs focused on disruptive technology, including AI, have seen significant flows this year. The surge has lifted funds like the Global X AI & Technology ETF and the Robotics & AI ETF, attracting billions in assets and delivering strong performances.
Thematic ETFs require more research than traditional funds, with performance spreads among AI-focused ETFs reaching 60% this year. The ETF market has seen rapid growth, with close to 800 new ETFs launched in the first nine months of 2025, surpassing the total number of individual stocks traded in the U.S.
Despite recent market jitters, thematic investing can be worthwhile for investors who understand the risks. Themes can run quickly, so investors should seize moments of opportunity and consider taking profits. Thematic ETFs offer exposure to key technology trends, but investors should be prepared for short-term volatility. 1. The stock market experienced a sharp decline today, with the Dow Jones Industrial Average dropping over 500 points. This is the largest single-day drop since March, raising concerns about the ongoing economic recovery.
2. A new study published in a leading medical journal suggests that wearing two masks can significantly reduce the spread of COVID-19. Researchers found that double masking can block over 90% of respiratory droplets, providing extra protection against the virus.
3. The United Nations has warned of a looming famine in Yemen, as funding for humanitarian aid continues to fall short. Millions of people are at risk of starvation, with the UN urging world leaders to step up their support to prevent a humanitarian catastrophe.
4. Tesla has announced plans to build a new electric vehicle manufacturing plant in India, marking its entry into the country’s growing EV market. The facility is expected to create thousands of jobs and help boost India’s renewable energy industry.
5. The Biden administration has unveiled a $2 trillion infrastructure plan aimed at modernizing the country’s transportation, energy, and broadband systems. The proposal includes investments in clean energy, job creation, and climate resilience, with funding coming from corporate tax increases.
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– Tesla announces plans to build a new factory in Austin, Texas, creating at least 5,000 jobs. The factory will produce the Cybertruck, Model Y, and Model 3 vehicles.
– Apple unveils new iPhone 12 lineup with 5G capabilities, improved cameras, and A14 Bionic chip. Prices start at $699 for the iPhone 12 mini and go up to $1,099 for the iPhone 12 Pro Max.
– Amazon Prime Day, originally scheduled for July, is rumored to be postponed until October due to the impact of the coronavirus pandemic. The annual event offers discounts and deals to Prime members.
– Disney restructures its media and entertainment divisions to focus on streaming services. The move comes as the company faces challenges with theme park closures and disruptions in movie releases.
– Microsoft announces plans to acquire ZeniMax Media, parent company of Bethesda Softworks, for $7.5 billion. The deal includes popular gaming franchises like The Elder Scrolls, Fallout, and Doom.: Hot tech stock ETFs are sitting on big gains. Is it time to sell?