Past performance on Wall Street is never a guarantee of future returns. However, the continued run for stocks across Q1 seems to indicate that investors are incredibly confident that momentum will continue across what's shaping up to be another strong year.
The S&P 500 is up about 10% since January. A few specific corners of the stock market are getting most of the attention, however, thanks to what some experts think are durable long-term opportunities that will lift these companies in the months to come.
The following seven thematic ETFs all offer tactical ways to invest in some of the hottest trends right now.
| ETF | THEME | EXPENSE RATIO |
| Grayscale Bitcoin Trust ETF (ticker: BTC) | Cryptocurrency | 1.50% |
| Global X Artificial Intelligence & Technology ETF (AIQ) | Artificial Intelligence | 0.68% |
| MicroSectors FANG+ ETN (FNGS) | Big Tech | 0.58% |
| SPDR S&P Biotech ETF (XBI) | Biotech | 0.35% |
| AdvisorShares Pure US Cannabis ETF (MSOS) | Cannabis | 0.83% |
| Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF (PDBC) | Commodities | 0.59% |
| iShares MSCI India ETF (INDA) | Emerging Markets | 0.65% |
Grayscale Bitcoin Trust ETF (GBTC)
- Assets: $27 billion
- Expense ratio: 1.50%, or $150 annually on every $10,000 invested
Regulators at the U.S. Securities and Exchange Commission opened the door to direct (or "spot") Bitcoin ETFs in 2024, in addition to prior cryptocurrency funds that held derivatives of digital assets or individual for-profit companies in the sector. Of the 11 ETFs getting permission to trade this year, Grayscale is the runaway winner as it has raced to a simply staggering size in short order and currently commands well over 10 times the assets of similar funds. As the largest fund that invests 100% of its assets directly in Bitcoin, it remains among the leading options for investors who don't want to manage a wallet themselves but want to play the movements of Bitcoin. And with Bitcoin prices up about 150% in the past 12 months, it's safe to say that the trend is decidedly higher in this cryptocurrency.
Global X Artificial Intelligence & Technology ETF (AIQ)
- Assets: $1.4 billion
- Expense ratio: 0.68%, or $68 annually on every $10,000 invested
Platforms including ChatGPT have ensured that AI is all the rage in 2024, and AIQ is one of the best ways for you to play this dynamic corner of Wall Street. It is a "Goldilocks" fund that is not too big and broad, but neither is it too small and hyper-focused on startups. Consider that AIQ has a number of Big Tech icons like Nvidia Corp. (NVDA) and Facebook parent Meta Platforms Inc. (META) and also smaller players like specialized Taiwanese semiconductor designer Global Unichip Corp. (TW.GUC) – a company you can't easily buy on domestic exchanges like these large-cap leaders. The 85 or so companies that make up this fund are a great mix of firms that collectively provide a wide play on the potential of AI.
MicroSectors FANG+ ETN (FNGS)
- Assets: $260 million
- Expense ratio: 0.58%, or $58 annually on every $10,000 invested
In a "risk on" environment where Big Tech is all the rage, why fill up your portfolio with anything other than the biggest and most dominant companies in Silicon Valley? That's what this FANG+ fund offers, with a focused list of just 10 total stocks that are a "who's who" of the companies working on Wall Street right now – led by Tesla Inc. (TSLA), Meta and Nvidia at present. If you really want to spice things up, there are also "leveraged" versions of this fund that look to offer two or three times the daily returns of this list of tech leaders. Those are even more risky than putting all your eggs in a basket of just 10 total companies. But if you believe in tech and don't mind the risk, consider MicroSectors and its thematic ETFs in 2024.
SPDR S&P Biotech ETF (XBI)
- Assets: $8 billion
- Expense ratio: 0.35%, or $35 annually on every $10,000 invested
A recent Morgan Stanley investment report notes that "smart" chemotherapy offers a $140 billion market over the next 15 years, and tech-enabled therapies for other illnesses could be a $50 billion opportunity over the next decade. If you want to get in on the ground floor of these next-gen health care products, this equal-weight biotech ETF is the best way to go. Unlike other thematic ETFs that tout a focus on innovators, XBI rebalances regularly to ensure none of its 120 or so holdings get too much influence in the portfolio. In fast-moving biotech stocks, this is a particularly important way to invest, since it promises true diversification instead of over-reliance on a few high-flying fads.
AdvisorShares Pure US Cannabis ETF (MSOS)
- Assets: $920 million
- Expense ratio: 0.83%, or $83 annually on every $10,000 invested
More than two-thirds of U.S. states have legalized use of marijuana in some form, and Vice President Kamala Harris just went on record as saying "we need to legalize marijuana" in March – the first such message from high up in the Biden White House. She's not alone, as prominent legislators are increasingly part of a nationwide movement to open the door to cannabis-friendly businesses. MSOS is a thematic ETF that offers a simple way to play this trend, providing exposure to publicly traded companies including Massachusetts-based Curaleaf Holdings Inc. (OTC: CURLF) and Chicago's Verano Holdings Corp. (OTC: VRNOF) – two firms valued at more than $1 billion each, and representing the potential upside of publicly traded companies with a foothold in the cannabis marketplace and extraordinary potential if federal decriminalization comes to pass.
Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF (PDBC)
- Assets: $4.5 billion
- Expense ratio: 0.59%, or $59 annually on every $10,000 invested
Inflation around the world remains a common theme, with the rate of price increases cooling off to "only" 5.8% globally in 2024 and 4.4% in 2025 according to the International Monetary Fund. And PDBC is one of the best ways to play this inflationary trend via a diversified basket of commodity futures. This thematic ETF is a bit complex when you look at the details, but the name explains it quite well. In short, Invesco seeks to provide a steady yield – currently north of 4% – by trading physical commodity futures contracts. And unlike other complex funds that trade derivatives, PDBC makes sure to do so in a way to avoid onerous K-1 tax forms. The result is a portfolio made up of futures contracts on 14 heavily traded commodities across the precious metals, industrial metals, energy and agriculture sectors – positioning you to effectively hedge against rising prices in the months ahead via one tactical ETF.
iShares MSCI India ETF (INDA)
- Assets: $8.7 billion
- Expense ratio: 0.65%, or $65 annually on every $10,000 invested
Up about 30% in the past 12 months, INDA tracks the MSCI India Index of the largest and most established companies that trade on the nation's largest stock exchanges – NSE and BSE. INDA's top three holdings include energy firm Reliance Industries Ltd., multinational financial services leader ICICI Bank Ltd. (IBN), and tech company Infosys Ltd. (INFY). With China's economy struggling right now amid fears of a housing downturn and geopolitical unrest making global investing a risky proposition lately, India stands out as a massive democratic economy with a strong GDP outlook. According to the International Monetary Fund, India's economy should expand by 6.5% in 2024 – putting it at No. 11 on the list of fastest-growing nations, behind much smaller nations including Benin and Rwanda despite its significantly larger and most reestablished economy.
