However, Keeley says some of last year’s star performing thematic ETFs have struggled through 2022. “This is a timely reminder that while you might like to invest in an idea or a theme, it is important to remember that the underlying companies that are part of these themes need to be profitable for you to ultimately make money.”

Taking up that point, Ben Johnson, director of global exchange-traded fund research for Morningstar, says flows into thematic ETFs globally have slowed dramatically this year.

“Thematic fund flows have fizzled in the past 12 months. At the end of April 2021, trailing 12-month flows into this universe peaked at nearly $US242 billion. As of the end of April 2022, that figured had declined more than 75 per cent. Global trailing 12-month inflows into thematic funds registered at $US59 billion at the end of this April,” he says.

Investors need to do their homework on how enduring a theme is. “While at face value the theme in question may be intuitive and appear to have durable investment merit, it might not be possible to capitalise on it via publicly traded stocks,” Johnson says.

The odds of picking a thematic fund that outperforms a low-cost global equity index fund over long-time horizons are stacked firmly against the investor in all regions. “Globally, just 45 per cent of all thematic funds launched prior to 2010 had survived to see 2020. Of these, only a quarter managed to beat the MSCI World Index. Although, those that do win, can win big,” he says.