$115 billion thematic ETF boom unhindered despite mounting losses

Year-to-date, 53% of thematic funds are underwater since their inception. Launches in 2022 have slowed to 38 from the 77 seen in the previous year, while closures have picked up to 20 from five

Thematic investing can be traced as far back as 1948 when a mutual fund named the Television Fund was launched. And if it’s lasted this long, it can survive the ravages of an inflation-lashed year — at least as far as proponents like Kenneth Lamont are concerned.

Aggressive rate hikes by central banks as they battle surging prices have been brutal for thematic ETFs, a cohort of funds that target investments based on trends like robotics or electric cars. Rising borrowing costs have been hammering these riskier, speculative bets.

Yet Lamont, a nine-year veteran at Morningstar UK Ltd., sees reason