The Year’s Top 3 Thematic ETFs as of August 2023


  • Investors can have exposure to high-growth sectors via direct investment in a stock or by purchasing thematic ETFs.
  • Sofi Web 3 ETF (TWEB): Returning 73% YTD, TWEB offers investors exposure to the numerous opportunities in Web 3.0.
  • VanEck Semiconductor ETF (SMH): The future of the modern economy will be underpinned not just by one semiconductor company but many.
  • WisdomTree Artificial Intelligence and Innovation Fund (WTAI): This ETF will give investors exposure to the AI craze.
top thematic etfs - The Year’s Top 3 Thematic ETFs as of August 2023

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Equity markets have remained buoyant in 2023. However, bouts of volatility or sour earnings can make investors hesitant about investing in one particular equity. If you are looking for a way to invest in the fast-growing and innovative technology sector without putting your hopes into one company, you might want to consider exchange-traded funds (ETFs). ETFs are collections of stocks or other securities that track an index, a sector, or a theme. They offer several benefits for investors, including diversification, low costs, liquidity, and transparency. In this article, I will introduce you to three tech-focused thematic ETFs that performed well in 2023. These ETFs are betting on emerging trends that are shaping the future of technology, such as web 3.0, semiconductors and artificial intelligence (AI).

 Sofi Web 3 ETF (TWEB)

Four letter blocks, spelling out Web 3.0.
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The Sofi Web 3 ETF (NASDAQ:TWEB) is the first Web 3 focused ETF on the market that invests in the full suite of innovative companies molding a decentralized internet. This includes NFTs and Tokenization, Blockchain Technology, Big Data and AI. Web 3.0 is expected to be the next evolution of the internet, where users will have more control over their data, identity and digital assets. Being an extension of the essential infrastructure that birthed cryptocurrencies, Web 3.0 will employ blockchain in a variety of use-cases.

Research analysts predict Web 3.0 could reach $81.9 billion in value by 2032, growing at a compound annualized growth rate of 44.5%. And, that tremendous growth has already lifted certain shares. TWEB has gained a whopping 73% year-to-date (YTD), trouncing the broader technology sector. Some of its top holdings include Nvidia (NASDAQ:NVDA), Meta Platforms (NASDAQ:META), Coinbase (NASDAQ:COIN), Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL).

VanEck Semiconductor ETF (SMH)

semiconductor stocks Close-up electronic circuit board. technology style concept. representing semiconductor stocks. undervalued semiconductor stocks
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Semiconductors are at the heart of today’s modern digital economy. These tiny electronics power everything from our smartphones and personal computers to cars, cloud servers and AI. Thankfully there exists a plethora of companies that specialize in either designing or manufacturing them. Therefore, if you are looking for exposure, the VanEck Semiconductor ETF (NASDAQ:SMH) might be good to have. SMH’s aim is to track the price and yield performance of the MVIS US Listed Semiconductor 25 Index. This index tracks the overall performance of companies involved in semiconductor production and equipment.

SMH has soared 54% YTD, beating both the Nasdaq and S&P 500 indices. Some of the ETF’s top holdings include Taiwan Semiconductor Manufacturing (NYSE:TSM), Intel (NASDAQ:INTC), Broadcom (NASDAQ:AVGO) and ASML Holding NV (NASDAQ:ASML). As new technologies continue to advance, they will require the computational power of advanced semiconductors. SMH’s holdings stand to benefit from this.

WisdomTree Artificial Intelligence and Innovation Fund (WTAI)

Black and cyber blue illustration of brain made out of light of circuit board with chip at the center of the brain, representing artificial intelligence (AI) stocks

The WisdomTree Artificial Intelligence and Innovation Fund (BATS:WTAI) tracks the price and yield performance of the WisdomTree Artificial Intelligence & Innovation Index. AI has received much hype this year after OpenAI released ChatGPT. AI and semiconductor breakthroughs are in tandem transforming various industries and sectors by improving efficiency and productivity. Still, these opportunities can prove difficult to catch individually, so thematic ETFs such as WTAI can make a positive difference.

WTAI has risen 35% YTD, making it one of the best-performing thematic ETFs in 2023. Some of its top holdings include Nvidia, IonQ (NYSE:IONQ), Advanced Micro Devices (NASDAQ:AMD) and NXP Semiconductors (NASDAQ:NXPI). WTAI’s access to the companies driving and enabling a fundamental shift in technology with AI will allow the ETF to continue to outperform.

On the date of publication, Tyrik Torres did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

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