Top Emerging Themes in ETFs for 2025

Did you know that global ETF assets have skyrocketed from $1.3 trillion in 2010 to a mind-boggling $10 trillion in 2023? Talk about a growth spurt! But here's the million-dollar question: What's next on the ETF horizon for 2025?

Imagine your portfolio as a time machine, zipping through sustainable investing landscapes and navigating the uncharted territories of AI and blockchain. Are you ready to surf the green wave of ESG or dive into the digital depths of disruptive tech? Buckle up, savvy investors, because we're about to unveil the crystal ball of ETF trends. From eco-warriors to tech titans, these emerging themes are set to redefine your investment strategy. So, are you in, or are you in?

Why you should care about emerging ETF themes

The investment world is ever-changing, and staying ahead of the curve is essential. ETFs are known for their adaptability, making them a popular choice for investors looking to ride the wave of emerging market trends. Tracking these themes isn’t just bright—it’s essential for building a future-ready portfolio.

Emerging ETF themes mirror broader societal, technological, and economic changes. Staying informed helps investors spot growth opportunities in pioneering sectors. With ETFs’ flexibility, you can adjust your strategy to capture upside potential and manage risk from market shifts.

Theme 1: ESG (Environmental, social, and governance)

ESG has moved from niche to mainstream, and for good reason. Investors want more than financial returns—they want to make a positive impact. ESG ETFs allow investors to support companies prioritising sustainability, ethical practices, and responsible governance.

The rise of ESG investing stems from growing awareness of climate change, social justice, and corporate responsibility. Companies with strong ESG credentials are considered lower risk and have better long-term prospects. As a result, ESG ETFs have captured the attention of both ethical investors and those looking for steady returns.

Why it matters: Companies with good ESG practices often outperform their peers over the long term. Investing in ESG ETFs supports businesses striving for a better future and setting your portfolio up for potential long-term growth.

Theme 2: Artificial intelligence & machine learning

AI and machine learning are transforming everything—from healthcare to banking. ETFs focused on these technologies give investors access to companies driving these advancements.

AI’s impact is everywhere: smart assistants, predictive analytics, and autonomous vehicles are just the beginning. Companies at the forefront of AI are seeing rapid growth, and ETFs tracking these firms offer exposure to this boom.

Why it matters: As AI evolves, the growth potential is immense. By investing in AI-focused ETFs, you’re tapping into a future of smarter systems, automation, and breakthrough innovations that can fuel major returns.

Theme 3: Blockchain & cryptocurrency

Blockchain is redefining finance, data security, and digital assets. While direct crypto investments can be risky, blockchain ETFs offer a safer, more diversified way to gain exposure.

Blockchain’s influence extends beyond Bitcoin. It’s transforming supply chains, contracts, and digital ownership. ETFs focusing on blockchain provide a way to invest in the broader tech shift without holding volatile cryptocurrencies.

Why it matters: Blockchain’s applications go beyond finance. It’s revolutionising multiple industries, and early exposure to ETFs tracking this shift could lead to significant gains as adoption grows.

Theme 4: Renewable energy & clean tech

The race toward net-zero emissions is fueling growth in renewable energy and clean tech. ETFs in this space give investors access to companies driving the green transition.

Clean energy—like solar, wind, and hydro—is becoming cost-competitive with fossil fuels. Policy shifts and technological advances are further accelerating growth. Cleantech ETFs capture a range of innovations aimed at reducing environmental impact.

Why it matters: Sustainability isn’t just good for the planet—it’s suitable for portfolios, too. Investors in clean tech ETFs can benefit from industry tailwinds and long-term growth as the world shifts to clean energy.

Theme 5: Biotechnology & healthcare innovation

Thanks to genetic research, drug development, and medical technology breakthroughs, the biotech and healthcare sectors are on the cusp of transformation. ETFs in this space offer exposure to companies shaping the future of healthcare.

From vaccines to personalised medicine, healthcare is evolving rapidly. Biotech companies are leading this change, and ETFs tracking healthcare innovation provide access to firms driving medical advances.

Why it matters: Healthcare innovation is constant. Investing in ETFs focused on biotech and healthcare innovation allows you to tap into game-changing advancements that improve health outcomes—and your financial future.

How to invest in emerging themes ETFs

Investing in theme-based ETFs is an opportunity to capture growth in tomorrow’s biggest trends. But smart investing requires strategy. Here’s how you can approach it:

1. Diversification is key — While emerging themes offer high growth potential, they’re also higher risk. Spread your investment across multiple themes to balance growth and risk.

2. Research thoroughly — Not all ETFs are equal. Look at their focus, sector exposure, and past performance to ensure alignment with your goals.

3. Stay up to date — Trends evolve fast. Follow market news and industry updates to adjust your strategy as needed.

Risks & things to watch out for

Theme-based ETFs are exciting but come with risks. Here’s what to keep in mind:

• Volatility — Emerging sectors experience wild price swings, which could impact ETF returns.

• Uncertainty — Some themes may take longer to mature, and others may not materialize as expected.

• Liquidity — ETFs with low trading volume can have higher bid-ask spreads, making them harder to trade.

The best approach is to balance emerging themes with more stable investments. Diversification smooths out the bumps while letting you capture long-term growth.

The future of ETFs

ETFs continue to evolve as the world’s most versatile investment tool. They’re at the heart of emerging themes like sustainability, AI, blockchain, and healthcare innovation. Staying ahead requires constant learning and a proactive approach to your portfolio.

Whether you’re drawn to clean energy, AI, or biotech, there’s an ETF. The key is to do your research, diversify your holdings, and stay on top of market shifts. The future of ETFs is dynamic and full of opportunity for those willing to look ahead.

Invest in the trends shaping tomorrow. With the right ETFs in your portfolio, you’ll be well-positioned to ride the waves of growth and innovation.