Trackinsight, a provider of ETF data and analytics, has launched a proprietary classification system for thematic ETFs.
Trackinsight has launched a proprietary taxonomy for thematic ETFs.
The Trackinsight Thematic Taxonomy is aimed at investors who are using ETFs to gain exposure to new and evolving secular trends including demographic shifts, innovative technologies and emerging industries.
Its development has been supported by asset manager and ETF issuer Legal & General Investment Management and index, advisory, and research company ROBO Global.
Thematic ETFs go beyond conventional sector-based investing to target non-traditional industries and future-facing concepts such as cyber security, robotics, medical marijuana, space or video gaming.
Story-driven and with immense appeal to retail investors, thematic ETFs have been one of the fastest-growing portions of the ETF industry, both in terms of the number of products and the value of assets under management.
According to Trackinsight, there are now 691 thematic ETFs from 124 different issuers listed worldwide, managing more than $297 billion in assets under management – a significant rise from the start of 2020, when there were fewer than 400 thematic ETFs with $90bn in assets.
Trackinsight’s classification system aims to provide a clear structure to the idiosyncratic and sometimes quirky range of thematic ETFs currently available to investors.
It categorizes ETFs according to a unique three-tiered methodology which maps each fund against five megatrends, 12 trends and 68 themes, providing a transparent framework for ETF research, comparison and analysis.
The classification process aims at capturing dynamically the emergence of new trends and themes over time.
Anne-Valère Amo, Head of ETF Selection at Trackinsight, said: “Thematic investing has brought a new dimension to portfolio construction, complementing traditional geographical, sector and style allocations. As an implementation solution breaking these usual boundaries, thematic ETFs needed a new dedicated taxonomy due to the limitations of existing fund classification frameworks.”
Howie Li, Head of ETFs at LGIM, added: “We are delighted to be part of this initiative. Trackinsight’s unique datasets and classification system can genuinely help investors of all shapes and sizes when it comes to their ETF fund selection.”