{"id":11162,"date":"2023-05-19T21:03:11","date_gmt":"2023-05-20T01:03:11","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/heres-where-blackrock-sees-a-top-thematic-etf-investing-opportunity-as-tech-soars\/"},"modified":"2023-05-19T21:03:11","modified_gmt":"2023-05-20T01:03:11","slug":"heres-where-blackrock-sees-a-top-thematic-etf-investing-opportunity-as-tech-soars","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=11162","title":{"rendered":"Here\u2019s where BlackRock sees a top thematic ETF investing opportunity as tech soars"},"content":{"rendered":"

Hello! This week\u2019s ETF wrap shines the light on electric vehicles, an industry that\u00a0 BlackRock\u2019s Jay Jacobs says has taken off but still has a way to go \u2014 the kind of \u201cinflection point\u201d the firm looks for in thematic investing opportunities.<\/p>\n

Please send feedback and tips to christine.idzelis@marketwatch.com or isabel.wang@marketwatch.com. You can also follow me on Twitter at\u00a0@cidzelis<\/a>\u00a0and find me on\u00a0LinkedIn. Isabel Wang is on Twitter at @Isabelxwang<\/a>.<\/p>\n

\n

Sign up\u00a0<\/strong>h<\/strong>e<\/strong>re<\/strong>\u00a0for our weekly ETF Wrap.<\/strong><\/p>\n

Electric vehicles and semiconductors are hot areas for exchange-traded funds based on returns so far this year, as technology-related stocks soar in 2023.<\/p>\n

EVs, which have been a tailwind for the semiconductor industry, represent one of the best investment themes among BlackRock\u2019s thematic ETFs, according to Jay Jacobs, the firm\u2019s U.S. head of thematics and active equity ETFs. BlackRock\u2019s iShares Self-Driving EV & Tech ETF
\n IDRV,
\n -0.05%<\/bg-quote>
\n has climbed 10.3% so far this year through Wednesday, compared with an 8.6% gain for the SPDR S&P 500 ETF Trust
\n SPY,
\n -0.15%<\/bg-quote>,<\/span>
\n according to FactSet data.\u00a0<\/p>\n

\u201cInnovation can happen slowly and then all at once,\u201d said Jacobs, in a phone interview. \u201cOver the last five years or so, we\u2019ve just seen an incredible acceleration of electric-vehicle adoption.\u201d<\/p>\n

While the EV industry has taken off, it still has a long way to go considering electric vehicles represent just 7% of total car sales in the U.S. \u2014 even after rapid sales growth over the past year, according to Jacobs.\u00a0<\/p>\n

\u201cWhen we look at thematic investing opportunities, that\u2019s exactly the inflection point that we are looking for,\u201d he said, referring to the juncture where an innovative idea turns into something being adopted by the mass market. \u201cThat\u2019s where the majority of the economic opportunity is going to materialize.\u201d<\/p>\n

Meanwhile, technology-related stocks have soared in 2023. The Technology Select Sector SPDR Fund
\n XLK,
\n -0.04%<\/bg-quote>,<\/span>
\n which tracks an index of S&P 500 tech stocks, has skyrocketed 24.1% this year through Wednesday, according to FactSet data. <\/p>\n

The three largest electric-vehicle ETFs based on assets under management are the Global X Autonomous & Electric Vehicles ETF
\n DRIV,
\n -0.11%<\/bg-quote>,<\/span>
\n the iShares Self-Driving EV & Tech ETF and the KraneShares Electric Vehicles & Future Mobility Index ETF
\n KARS,
\n <\/bg-quote>,<\/span>
\n according to Aniket Ullal, head of ETF data and analytics at CFRA Research.<\/p>\n

The Global X Autonomous & Electric Vehicles ETF has gained 16.7% this year through Wednesday, while the KraneShares Electric Vehicles & Future Mobility Index ETF has risen slightly more than 5% over the same period, FactSet data show.\u00a0<\/p>\n

The Global X Autonomous & Electric Vehicles ETF has \u201cpretty big exposure to technology companies,\u201d said Ullal, pointing to its holdings of Google parent Alphabet Inc.
\n GOOGL,
\n -0.06%<\/bg-quote>
\n and Apple Inc.
\n AAPL,
\n +0.06%<\/bg-quote>
\n as examples. The ETF\u2019s top five holdings on May 17 included Nvidia Corp.
\n NVDA,
\n -1.31%<\/bg-quote>,<\/span>
\n Tesla Inc.
\n TSLA,
\n +1.84%<\/bg-quote>,<\/span>
\n Alphabet, Apple and Toyota Motor Corp.
\n 7203,
\n +0.20%<\/bg-quote>,<\/span>
\n according to Global X\u2019s website.<\/p>\n

Meanwhile, the KraneShares Electric Vehicles & Future Mobility Index ETF\u2019s largest holdings were Panasonic Holdings Corp
\n 6752,
\n +2.77%<\/bg-quote>,<\/span>
\n Nidec Corp.
\n 6594,
\n +0.99%<\/bg-quote>,<\/span>
\n Contemporary Amperex Technology
\n 300750,
\n -1.03%<\/bg-quote>,<\/span>
\n BYD Co.
\n 002594,
\n +0.04%<\/bg-quote>
\n and Samsung
\n 006400,
\n +0.87%<\/bg-quote>
\n as of May 17, data on KraneShares\u2019s website showed.<\/p>\n

As for the iShares Self-Driving EV & Tech ETF, the fund\u2019s five biggest weights on May 17 were Li Auto Inc.
\n 2015,
\n <\/bg-quote>,<\/span>
\n BYD
\n 1211,
\n +0.08%<\/bg-quote>,<\/span>
\n ABB
\n ABBN,
\n +2.29%<\/bg-quote>,<\/span>
\n Allkem and Volkswagen
\n VOW3,
\n -0.08%<\/bg-quote>,<\/span>
\n according to the fund\u2019s holdings data on BlackRock\u2019s website.<\/p>\n

BlackRock\u2019s fund aims for a \u201cpure play\u201d strategy relating to electric and autonomous vehicles, Jacobs said. Meanwhile, he said, the iShares Semiconductor ETF
\n SOXX,
\n -0.51%<\/bg-quote>
\n should continue to benefit from a tailwind from the proliferation of electric vehicles as well as from the growth in artificial intelligence in 2023.<\/p>\n

The iShares Semiconductor ETF has skyrocketed 24% this year through Wednesday, according to FactSet data. <\/p>\n

Semiconductor ETFs have seen \u201cgood flows\u201d this year, broadly attracting about $1.9 billion of capital from investors through May 15, according to Ullal. By contrast, the \u201cfuture mobility\u201d category of ETFs, which includes electric-vehicle funds, have seen aggregate outflows of $97 million over the same period, he said.<\/p>\n

As usual, here\u2019s your look at the top- and bottom-performing ETFs over the past week through Wednesday, according to FactSet data.<\/p>\n

The good\u2026<\/h2>\n\n\n\n\n\n\n\n\n
\n Top Performers<\/strong><\/p>\n<\/td>\n\n %Performance<\/strong><\/p>\n<\/td>\n<\/tr>\n
\n SPDR S&P Regional Banking ETF
\n KRE,
\n -1.78%<\/bg-quote>\n <\/td>\n		\n 9.8<\/p>\n<\/td>\n<\/tr>\n
\n United States Natural Gas Fund LP
\n UNG,
\n -0.27%<\/bg-quote>\n <\/td>\n		\n 8.0<\/p>\n<\/td>\n<\/tr>\n
\n iShares U.S. Regional Banks ETF
\n IAT,
\n -1.22%<\/bg-quote>\n <\/td>\n		\n 7.8<\/p>\n<\/td>\n<\/tr>\n
\n SPDR S&P Bank ETF
\n KBE,
\n -1.63%<\/bg-quote>\n <\/td>\n		\n 7.5<\/p>\n<\/td>\n<\/tr>\n
\n SPDR S&P Semiconductor ETF
\n XSD,
\n -0.07%<\/bg-quote>\n <\/td>\n		\n 6.4<\/p>\n<\/td>\n<\/tr>\n
\n Source: FactSet data through Wednesday, May 17. Start date May 11. Excludes ETNs and leveraged products. Includes NYSE, Nasdaq and Cboe traded ETFs of $500 million or greater.<\/p>\n<\/td>\n\n <\/td>\n<\/tr>\n<\/table>\n

\u2026and the bad<\/h2>\n\n\n\n\n\n\n\n\n
\n Bottom Performers<\/strong><\/p>\n<\/td>\n\n %Performance<\/strong><\/p>\n<\/td>\n<\/tr>\n
\n PIMCO 25+ Year Zero Coupon US Treasury Index ETF
\n ZROZ,
\n -1.00%<\/bg-quote>\n <\/td>\n		\n -3.3<\/p>\n<\/td>\n<\/tr>\n
\n Utilities Select Sector SPDR Fund
\n XLU,
\n -0.15%<\/bg-quote>\n <\/td>\n		\n -3.3<\/p>\n<\/td>\n<\/tr>\n
\n Vanguard Utilities ETF
\n VPU,
\n -0.14%<\/bg-quote>\n <\/td>\n		\n -3.1<\/p>\n<\/td>\n<\/tr>\n
\n Vanguard Extended Duration Treasury ETF
\n EDV,
\n -0.90%<\/bg-quote>\n <\/td>\n		\n -3.1<\/p>\n<\/td>\n<\/tr>\n
\n iShares U.S. Utilities ETF
\n IDU,
\n -0.16%<\/bg-quote>\n <\/td>\n		\n -3.0<\/p>\n<\/td>\n<\/tr>\n
\n Source: FactSet data <\/p>\n<\/td>\n\n <\/td>\n<\/tr>\n<\/table>\n

New ETFs<\/h2>\n
    \n
  • \n Roundhill Investments said Thursday that it launched the Roundhill Generative AI & Technology ETF
    \n CHAT,
    \n -0.74%<\/bg-quote>,<\/span>
    \n a fund that provides exposure to \u201ccompanies at the forefront of artificial intelligence technology, with a focus on generative AI.\u201d\u00a0<\/p>\n<\/li>\n
  • \n Putnam Investments announced on Thursday the launch of the Putnam Emerging Markets ex-China ETF
    \n PEMX,
    \n +0.40%<\/bg-quote>,<\/span>
    \n an actively managed fund that focuses on emerging-market companies excluding investments in China and Hong Kong.<\/p>\n<\/li>\n
  • \n BNY Mellon Investment Management announced May 17 the launch of BNY Mellon Women\u2019s Opportunities ETF
    \n BKWO,
    \n -0.20%<\/bg-quote>
    \n and BNY Mellon Innovators ETF
    \n BKIV,
    \n -0.09%<\/bg-quote>.<\/span><\/p>\n<\/li>\n<\/ul>\n

    Weekly ETF reads<\/h2>\n<\/p><\/div>\n