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Themed ETFs will end in 2021. Ways to manage your wealth

Thematic exchange-traded funds have struggled this year.

Nearly 100 of those ETFs are down 20% or more for 2021, with popular funds like Ark Innovation ETF (ARKK) and Online Retail ETF Amplification (IBUY) saw some of the biggest declines.

ETF Action Founding Partner, Alex Shepard, tells CNBC’s “Edge ETF” in Monday.

Loss tax is a strategy in which investors sell loss-making investments, realize the loss, and reduce their capital gains taxes.

“When you look at the massive amount of outflow that went into some of these topics in January and February of this year when they peaked, if you’re not looking at your portfolio right now and you have some position among these … that’s what you should do,” Shepard said.

However, investors should exercise caution when swapping certain ETFs for others, Global X’s Jay Jacobs said in the same interview.

“In the thematic ETF space, there are a lot of ETFs that sound similar but have very different holdings. There are about six. Robot ETF out there. The average overlap between these funds is less than 20%,” said the company’s senior vice president and head of research and strategy.

“If you are selling off a robot fund and starting exposure to the next, just be very careful about the actual holdings you are getting in that fund,” he said. “But… I think investors should always consider tax loss, especially at this time of year and the fact that we have more thematic ETFs than ever before that gives investors a lot of money. invest in more options and in the end that’s great for the market.”

It also helps prepare for volatility for more niche products, says Jacobs, whose company offers 90 ETFs that focus on topics, earnings, commodities and other strategies.

“These funds are going to be volatile in the near term and are expected to grow over the long term,” Jacobs said. “We know marijuana won’t be legalized across the United States overnight. We know robots won’t be used in hundreds of warehouses in the United States overnight.”

“Because these are focused portfolios that can be driven by short-term sentiment, there is bound to be volatility,” he said. “By diversifying across topics, … whether it’s technology, whether it’s infrastructure, whether it’s people and demographic driven trends, I think that’s what That creates a much stronger approach to thematic investing, where we can weather these ups and downs in the near term.”

https://www.cnbc.com/2021/12/16/thematic-etfs-end-2021-on-a-sour-note-ways-to-manage-your-holdings.html Themed ETFs will end in 2021. Ways to manage your wealth

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