Cannabis and Precious Metals ETFs Shine While Rebalancing Skews Thematic Outflows

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The U.S. thematic ETF market, comprising 381 funds from 93 issuers with a total of $223 billion in assets under management, experienced a week of sharp divergences. Niche themes such as Cannabis and Precious Metals delivered standout gains, capitalizing on specific market catalysts. However, the week’s headline flow numbers were heavily skewed by significant, non-economic rebalancing activity in a few large innovation funds, which masked a more nuanced picture of investor sentiment across the thematic space.

Weekly Performance Recap: Niche Themes Dominate Returns

Thematic performance was led by a handful of specialized categories, with Evolving Consumer (+2.21%) posting the strongest gains among the largest thematic groups, driven by a remarkable surge in Cannabis & Vice funds (+8.12%). Precious Metals (+2.44%) also had a strong week, benefiting from momentum in gold and silver miners. In contrast, the Disruptive Tech (+0.03%) category remained flat, weighed down by weakness in AI & Big Data and Mega-Cap Leader segments.

Thematic Category Performance (Week-to-Date):

  • Precious Metals: 2.44%
    • Top ETF: SLVP (iShares MSCI Global Silver Miners ETF): 3.28%
    • Bottom ETF: AGMI (Themes Silver Miners ETF): 1.38%
  • Sustainability: 2.37%
    • Top ETF: ETEC (iShares Breakthrough Environmental Solutions ETF): 5.75%
    • Bottom ETF: PWRD (TCW Transform Systems ETF): -1.66%
  • Evolving Consumer: 2.21%
    • Top ETF: YOLO (AdvisorShares Pure Cannabis ETF): 11.39%
    • Bottom ETF: SOCL (Global X Social Media ETF): -1.68%
  • FinTech: 1.95%
    • Top ETF: WGMI (CoinShares Bitcoin Mining ETF): 6.00%
    • Bottom ETF: ARKF (ARK Fintech Innovation ETF): -0.23%
  • Health Innovation: 1.48%
    • Top ETF: IBRN (iShares Neuroscience and Healthcare ETF): 2.73%
    • Bottom ETF: ARKG (ARK Genomic Revolution ETF): 0.00%
  • Infrastructure: 1.38%
    • Top ETF: SIMS (SPDR S&P Kensho Intelligent Structures ETF): 3.66%
    • Bottom ETF: AIPO (Defiance AI & Power Infrastructure ETF): -1.04%
  • Natural Resources: 1.14%
    • Top ETF: CUT (Invesco MSCI Global Timber ETF): 3.43%
    • Bottom ETF: LITP (Sprott Lithium Miners ETF): -3.37%
  • Midstream & MLPs: 0.90%
    • Top ETF: USAI (Pacer American Energy Independence ETF): 1.59%
    • Bottom ETF: TPZ (Tortoise Essential Energy Fund): 0.23%
  • Industrial Revolution: 0.78%
    • Top ETF: FDRV (Fidelity Electric Vehicles and Future Transportation ETF): 3.54%
    • Bottom ETF: ARTY (iShares Future AI & Tech ETF): -1.81%
  • Alternative Equity: 0.53%
    • Top ETF: PEX (ProShares Global Listed Private Equity ETF): 1.14%
    • Bottom ETF: GPZ (VanEck Alternative Asset Manager ETF): 0.02%
  • Thematic – Multi-Sector: 0.35%
    • Top ETF: QQQS (Invesco NASDAQ Future Gen 200 ETF): 3.47%
    • Bottom ETF: SPRX (Spear Alpha ETF): -2.49%
  • Disruptive Tech: 0.03%
    • Top ETF: KOID (KraneShares Global Humanoid and Embodied Intelligence Index ETF): 3.53%
    • Bottom ETF: BAI (iShares A.I. Innovation and Tech Active ETF): -2.96%

Weekly Flows Summary: Rebalancing Distorts Headline Numbers

Thematic funds saw net outflows of nearly $2.9 billion over the past week, though this figure is misleading. The vast majority of these redemptions were concentrated in a handful of large innovation-focused ETFs and are understood to be part of a special rebalancing process for tax efficiency, rather than a reflection of negative investor sentiment. Looking at more organic flows, the Infrastructure category was a clear bright spot, attracting over $423 million in new assets, with funds focused on industrial reshoring and the smart grid seeing particular interest. Elsewhere, notable organic outflows were seen in the junior silver miners and certain AI-focused technology funds.

Largest Individual ETF Flows (5-Day):

  • Inflows:
    1. AIRR (First Trust RBA American Industrial Renaissance ETF): +$121M
    2. IGF (iShares Global Infrastructure ETF): +$116M
    3. IYZ (iShares U.S. Telecommunications ETF): +$83M
    4. AIQ (Global X Artificial Intelligence & Technology ETF): +$74M
    5. GRID (First Trust Nasdaq Clean Edge Smart GRID Infrastructure Index Fund): +$64M
  • Outflows:
    1. ARKK (ARK Innovation ETF): -$2,645M
    2. ARKW (ARK Next Generation Internet ETF): -$568M
    3. SILJ (Amplify Junior Silver Miners ETF): -$199M
    4. ARKF (ARK Fintech Innovation ETF): -$185M
    5. BAI (iShares A.I. Innovation and Tech Active ETF): -$119M

Issuer and Product Landscape

The thematic ETF market remains concentrated among a few key players. The top three issuers by assets under management are Global X (16.72% market share), First Trust (15.99%), and iShares (15.55%). For the week, First Trust led all issuers with net inflows of $224 million, while ARK experienced the largest net outflows, shedding over $3.4 billion, primarily due to the aforementioned rebalancing activity. The pace of product development continues, with 17 new thematic ETFs launched over the past three months. First Trust was the most active in this period with three new launches. On the other side of the ledger, iShares had the most closures, liquidating three of its thematic offerings.

For a detailed breakdown of all data, including individual fund performance and flows, please refer to the full ETF Action weekly thematic reports.

Disclosures

This material is for informational purposes only and should not be considered investment advice. All investments, including ETFs, involve risk, including the possible loss of principal. Investors should consider their investment objectives, risks, charges, and expenses carefully before investing.

This analysis was developed by the team at ETF Action. We leverage advanced AI tools to assist in the drafting and refinement of our content, based on our expert prompts, direction, and final review.

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