With more thematic ETFs launching every year, many investors are wondering whether they deserve a place in their portfolio.
Thematic ETFs can seem exciting, especially after strong market performance. But they also come with risks that many investors overlook.
In this video, I explain the three biggest traps investors often fall into when investing in thematic ETFs:
* Concentration risk
* Chasing momentum and past performance
* Missing out on overlooked sectors of the market
At Stockspot, we believe investing should be simple, diversified and built for the long term. That’s why we generally prefer broad, low-cost ETF portfolios over narrowly focused thematic investments.
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Stockspot Pty Ltd ABN 87 163 214 319 is a licensed Australian Financial Services provider (AFSL 536082) regulated by ASIC. Any advice contained in this video is general advice only and has been prepared without considering your objectives, financial situation or needs. Before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice.
Stockspot Super/ Pension is offered as the Stockspot MDA on Super Simplifier. Before opening an account please read the Stockspot FSG, Stockspot Super MDA Guide, and the Super Simplifier PDS, along with other relevant disclosure documents including your personalised Statement of Advice (SOA) and Investment Agreement.
Investing into financial products involves risk. Past performance of financial products is no assurance of future performance. Please read our FSG before deciding whether to obtain financial services from us.