An ‘all-stars’ ETF designed to track the stock market’s most popular themes is in the works, new report says

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  • An fund called the Thematic All-Stars ETF is in the works for investors seeking a vehicle designed to track the stock market’s hottest themes.
  • This passively managed fund will be launched by Amplify ETFs, sponsored by Amplify Investments.
  • The fund will not allow a company to make up more than 5% of its overall holdings.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

For investors who want to put their money in the hottest investing themes, a new exchange-traded fund may the answer for you: the Thematic All-Stars ETF.

These thematic segments include disruptive technology, evolving consumer, fintech, health care innovation, industrial revolution, sustainability, among others.

Currently in the works, this passively managed fund will be launched by Amplify ETFs, sponsored by Amplify Investments, which has over $4.7 billion in assets across its suite of ETFs as of March 2021, Bloomberg first reported.

Amplify ETFs filed a prospectus with the US Securities Exchange Commission dated April 28 to launch Amplify Thematic All-Stars ETF.

“The thematic universe includes all ETFs that meet the index provider’s proprietary classification requirements, which are designed to identify ETFs with strategies seeking to capture investment opportunities,” the prospectus said.

But unlike many other funds, the Thematic All-Stars ETF will not allow a company to represent more than 5% of its overall holdings.

Any excess weight will be prorated among remaining constituents, the prospectus said. As of writing, the index contained 160 stocks, which will be reconstituted and rebalanced monthly at the close of the first Friday of each calendar month, the prospectus added.

If approved, the fund will join a list of growing ETFs that have recently debuted to cater to the growing appetite of investors following the GameStop mania driven by Reddit’s Wall Street Bets forum in January.

For instance, an ETF called FOMO, which aims to invest in current or emerging trends, was filed with the US Securities and Exchange Commission in March, intending to alleviate investors’ fears of missing the next big thing.

“With ETF markets booming during the coronavirus pandemic, millennials have also been a key driver to the sector’s growth,” a Finbold report said. “In this case, young people who are not familiar with the operations of the financial markets are well-served by using a passive income management approach, and ETFs offer the solutions.”

The assets under management of the10 largest ETFs surged 47.56% to $1.69 trillion between March 2020 and April 2021. In the past year, these funds added $546.63 billion, according to Finbold.

Read more: Jefferies unveils 14 stocks with exposure to the booming NFT opportunity as digital collectibles continue to become more mainstream despite the recent price slump

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Blackstone’s Jonathan Gray says the private equity giant likes the travel, sustainability, and housing sectors amid the economic reopening

Jonathan Gray
Jonathan Gray, Blackstone President and Chief Operating Officer, at the CNBC Institutional Investor Delivering Alpha conference July 18th in NYC.

  • Blackstone President Jonathan Gray says he likes the travel, sustainability, and housing sectors as the economy restarts.
  • Blackstone has focused on “thematic investing” in recent quarters and found great success.
  • The private equity firm beat analyst estimates for earnings and segment revenue in Q1 while AUM reached $649 billion.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

In an interview with Bloomberg’s Sonali Basak on Thursday, Blackstone’s President and Chief Operating Officer Jonathan Gray said his firm invested in the travel, sustainability, and housing sectors amid the economic reopening and is “excited” about the sectors’ potential moving forward.

Gray added that Blackstone has moved toward “thematic investing” during the pandemic due to the transformation of the US economy by technology and said the firm plans to continue the strategy in 2021.

“In an environment that’s being transformed by technology, how can you see the best neighborhoods, the areas that will benefit from what’s happening,” Gray said. “We’ve done a lot in technology and life sciences, global logistics, we had huge appreciation in the quarter in our portfolio and a lot of that was in those areas.”

Gray said Blackstone’s top themes for 2021 are travel, sustainability, and housing due to the COVID recovery.

“Looking forward, and certainly in the first quarter, we’ve been doing a lot around the COVID recovery play, so we’ve invested in a bunch of travel-related businesses…that’s an area we’re excited about,” Gray said.

Gray also said Blackstone is “excited about what’s happening in sustainability” and that the firm did a number of deals in Europe and the US to build out the electrical grid and help with environmental remediation.

Finally, Gray said he’d “add housing as another area where we have a bunch of enthusiasm” and that his firm has done deals in the US both in rentals and in single-family housing in the first quarter.

According to Bloomberg, Blackstone invested $17.7 billion in the travel, sustainability, and housing sectors in the first three months of 2021, buying hotels like Extended Stay America, private jet operator Signature Aviation, and a UK-based travel company called Bourne Leisure.

Gray was also asked about his views on inflation.

“I think that really is the big question, that’s the concern that exists and you see it in steel and lumber prices which are up double digits. Used cars are up 25% year-over-year. We’re beginning to see pressure on wages…and so I think that’s something that all investors need to take into account. I think there’s some risk on valuation multiples,” Gray said.

Gray’s comments come after Blackstone posted strong earnings results on Thursday.

Assets under management grew to $649 billion and private equity distributable earnings jumped 160%. Real estate distributable earnings also doubled to $540.8 million.

This pushed total first-quarter distributable EPS to $0.96, which beat analyst estimates for $0.76 and topped the $0.46 figure the company turned in the first quarter of 2020.

Shares of Blackstone traded up over 4% on Thursday after earnings were released.

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