Thematic ETFs have become a popular way for investors to buy into specific markets they believe will experience rapid growth. Rather than picking individual stocks, these funds hold a diversified basket of companies within a particular market. That way, investors don’t have to worry about building an entire portfolio or rebalancing every quarter.
In this article, we’ll look at some top-performing markets and thematic ETFs targeting those markets last year.
What Markets Grew the Fastest?
The U.S. has been among the top-performing markets in the world over the past couple of years. After notching a 24% gain in 2023, the S&P 500 Index rose another 24% in 2024, reaching record highs. While most of the top performers were in the technology space, almost every major industry experienced some growth last year.
Source: Finviz
Palantir (340.5%), NVIDIA (171.2%), Broadcom (107.7%), and other tech stocks helped drive the industry 37.81% higher over the past year. Meanwhile, Vistra (257.9%), GE Verona (150.6%), United Airlines (135.3%), Texas Pacific Land (+113.9%), and other top performers helped boost a broad range of non-tech sectors.
Real estate, healthcare, and basic materials were the only industries in the red over the past year. While rent and housing prices rose, high interest rates increased borrowing costs and depressed profit margins. Healthcare stocks also moved sharply lower following Trump’s win due to the greater level of uncertainty in the market.
Top 10 Thematic ETFs in 2024
Thematic ETFs track specific industry subsets — or themes — using passive indices or active management. Last year, crypto and tech companies dominated the top-performing thematic funds lists by returns and net inflows.
Bitcoin Boosts Crypto
Thematic ETFs focused on the cryptocurrency markets were the best performers over the past year. After a relatively quiet start to 2024, Bitcoin prices soared sharply higher following Trump’s victory, bringing crypto ETFs along with them. The world’s largest cryptocurrency even briefly surpassed a $2 trillion market capitalization.
These funds are sorted by their 1-year total return, which ranges from 34% to 134%. They have AUM between $93M and $250M, with expenses running between 0.3% and 0.85%. They are currently yielding between 0.1% and 7%.
| Name | Ticker | Type | Actively Managed? | AUM | 1-year Total Ret (%) | Yield | Expense |
|---|---|---|---|---|---|---|---|
| First Trust SkyBridge Crypto Industry and Digital Economy ETF | CRPT | ETF | Yes | $104M | 133.9% | 7% | 0.85% |
| Bitwise Crypto Industry Innovators ETF | BITQ | ETF | No | $220M | 73.4% | 0.9% | 0.85% |
| Schwab Crypto Thematic ETF | STCE | ETF | No | $93.5M | 62.6% | 1.1% | 0.3% |
| Valkyrie Bitcoin Miners ETF | WGMI | ETF | Yes | $250M | 47.1% | 0.2% | 0.75% |
| Fidelity Crypto Industry and Digital Payments ETF | FDIG | ETF | No | $164M | 34% | 0.1% | 0.42% |
AI Drives Cloud Computing
The latest artificial intelligence technologies rely on specialized hardware to function. GPUs made by NVIDIA and AMD are critical for training the latest large-language models like ChatGPT. Meanwhile, data centers provided by Microsoft and Amazon make it easy to scale these models to millions of users.
These funds are sorted by their 1-year total return, which ranges from 21% to 72%. They have AUM between $51M and $3.66B, with expenses running between 0.41% and 0.6%. They are currently yielding between 0% and 3.8%.
| Name | Ticker | Type | Actively Managed? | AUM | 1-year Total Ret (%) | Yield | Expense |
|---|---|---|---|---|---|---|---|
| VanEck Digital Transformation ETF | DAPP | ETF | No | $204M | 72.1% | 3.8% | 0.51% |
| First Trust Cloud Computing ETF | SKYY | ETF | No | $3.66B | 35.4% | 0% | 0.6% |
| Pacer Data and Digital Revolution ETF | TRFK | ETF | No | $51M | 34.7% | 0.2% | 0.6% |
| iShares U.S. Digital Infrastructure and Real Estate ETF | IDGT | ETF | No | $102M | 23.2% | 1.4% | 0.41% |
| Fidelity Cloud Computing ETF | FCLD | ETF | No | $87.1M | 21.6% | 0% | 0.41% |
Crypto Powers Fintech
Fintech and financial services companies rounded out our list of the top-performing thematic ETFs last year. Driven by companies like Robinhood Markets and Coinbase Global, these companies benefited from the growing interest in crypto over the past year (due to higher prices). And deregulation over the coming years could drive growth further.
These funds are sorted by their 1-year total return, which ranges from 26% to 37%. They have AUM between $349M and $1.76B, with expenses running between 0.35% and 0.68%. They are currently yielding between 1.1% and 1.6%.
| Name | Ticker | Type | Actively Managed? | AUM | 1-year Total Ret (%) | Yield | Expense |
|---|---|---|---|---|---|---|---|
| SPDR® S&P Capital Markets ETF | KCE | ETF | No | $540M | 37% | 1.6% | 0.35% |
| iShares U.S. Broker-Dealers & Securities Exchanges ETF | IAI | ETF | No | $1.76B | 35.8% | 1.2% | 0.4% |
| iShares U.S. Financial Services ETF | IYG | ETF | No | $1.66B | 30.3% | 1.3% | 0.39% |
| Global X FinTech ETF | FINX | ETF | No | $349M | 26.1% | 1.1% | 0.68% |
The Bottom Line
Tech themes dominated the top performers lists over the past year, driven by Bitcoin’s meteoric rise, artificial intelligence, and ongoing strength in gaming. But, of course, past performance is no guarantee of future results. The top-performing themes in 2025 could be very different from those in 2023 and 2024.
