Are ETF Investors Missing Out on Some Macro Driven Thematic Opportunities

Although certain ETF categories have shown impressive returns due to macro trends, investors have yet to shift their focus towards them. For instance, currency-hedged Japanese equity ETFs have outperformed their unhedged counterparts by 17% this year and 14% last year, but these hedged products have not been fully utilized by investors. ETFs linked to crypto and fintech have also experienced negative flows this year. However, the DC Court of Appeals’ decision in favor of Grayscale’s bitcoin ETF conversion could potentially spark investor interest. Additionally, ETF investors have not yet fully participated in the AI-driven surge in tech stocks this year.