You can build a great thematic ETF. But if no one understands it or trusts it, it won’t scale.
That was the underlying message from a roundtable hosted by S&P Dow Jones Indices this week. The mechanics of thematic investing are getting more advanced. But from a communications standpoint, the fundamentals haven’t changed. If anything, they matter more.
Here are the key takeaways through that lens:
Precision builds credibility
One of the strongest themes in the discussion was the need for tighter definitions.
Companies are no longer in single silos; they are straddling multiple themes. A fund limits its ability to stand out when it can be summed up with “this is a defence ETF” or “this captures AI.” Investors are asking:
- What exactly sits inside the theme?
- What is the criteria for inclusion?
- Where are the boundaries?
That level of clarity is becoming a differentiator. From a communications perspective, this is critical. Vague positioning leads to vague understanding and weak conviction. This is also where concerns around “theme washing” start to surface.
The firms that stand out are the ones that can explain their scope and methodology simply, consistently and with confidence. That means having firm guard rails in place and being able to validate why a company has been selected, and back it up with a clear audit trail.
As the market becomes more crowded, methodology is what separates credible exposure from vague thematic packaging. If that methodology isn’t clearly communicated, the story quickly falls apart.
Thematics are, by nature, opportunistic and constantly evolving. That brings opportunity, but also risk. Making index maintenance visible and easy to understand helps manage both. Ultimately, investors don’t just want exposure. They want to understand the reasoning behind it and how that reasoning holds up as the theme develops.
Data is powerful, but explanation matters more
There’s no shortage of ideas. With more data, better tools and AI-driven analysis, it’s now easier than ever to identify and package a theme. Instead of waiting for earnings data, machine learning and natural language processing can help pick up signals from filings and earnings calls, track emerging trends, look at the forward trajectory of businesses, and capture companies as they move into a theme, not just once they are established.
When it comes to removing the short-term noise from the longer term picture, product specialists noted the powers of AI. They also noted that it’s not enough to say “we use AI.” The value comes from explaining:
- What the technology is doing
- How it improves outcomes
- How it fits within a rules-based framework
In short, the message needs to bridge the gap between innovation and trust.
Storytelling is the edge
One point came through clearly: ETFs don’t sell themselves. Even in a growing market – European ETF assets surpassed $3.5 trillion in late February – the winners are the ones that get distribution right.
That breaks down into three areas:
- Platforms – making the product accessible
- Marketing and PR – building awareness through content, events and media engagement.
- Sales – Having boots on the ground and taking the story directly to prospective investors.
Thematics have an advantage here. They come with a story – and stories sell.
These ETFs are getting more sophisticated. But success still comes down to three things:
- Clarity – define the theme precisely
- Credibility – explain how it’s constructed
- Communication – tell a story that resonates
The firms that get this right will be the ones to build conviction – and flows – around them. That’s where we spend our time: helping asset managers and ETF issuers strengthen the narrative, simplify complex methodologies, and ensure consistency across all channels. Good ideas alone won’t suffice – it’s how you explain them that matters.