# Gen Z bets big on themed ETFs, with risks

> Young investors are pouring billions into exchange-traded funds tied to AI, space and other trends. Experts warn they need a strategy.
- Title: Gen Z bets big on themed ETFs, with risks · CNBC | Shortify
- Summary: Young investors are pouring billions into exchange-traded funds tied to AI, space and other trends. Experts warn they need a strategy. Gen Z investors are…
- Keywords: gen z investors, themed etfs, artificial intelligence, exchange-traded funds, portfolio diversification, morningstar, nasdaq, investment strategy, business, finance, Gen, bets
- Source: CNBC — https://cnbc.com/2026/09/21/themed-etfs-gen-z-investors.html
- Author: Kamaron McNair
- Published: 2026-09-21T13:00:01+00:00
- Read time: 1 min
- Topics: gen z investors, themed etfs, artificial intelligence, exchange-traded funds, portfolio diversification, morningstar, nasdaq, investment strategy, business, finance
## Why diversification matters
A healthy portfolio spreads money across many companies and sectors. This protects you if one company or industry suddenly declines.
## What themed ETFs are
Themed exchange-traded funds focus on a single sector like artificial intelligence or space exploration, or broader themes like infrastructure.
## How they complement strategy
Todd Rosenbluth, head of research at investment firm TMX VettaFi, says themed ETFs let investors increase exposure to specific trends while holding smaller, targeted companies.

> A thematic ETF can be a great complement to those existing strategies because it allows investors to double-click or increase their exposure to an investment theme.
## Money flooding in since late twenty twenty-four
Net inflows to themed ETFs totaled seventy six billion dollars since December twenty twenty-four, according to Morningstar analysis.
## AI funds lead the charge
Artificial intelligence themed ETFs account for nearly a third of recent inflows. Rosenbluth says investors have confidence in the longer-term AI trend.
## Gen Z most interested
Nasdaq's twenty twenty-four survey found thirty four percent of Gen Z investors said they're interested in thematic funds, the highest of any age group.
## Diversify across themes
Rosenbluth warns that if spending slows for AI, related ETFs will suffer. Investors should spread bets across utilities, space and infrastructure too.

> If and when spending slows down for artificial intelligence, that's going to negatively impact related ETFs.
## Check what you already own
Make sure themed ETFs don't duplicate large-cap stocks you already hold through index funds like the S and P five hundred or Nasdaq one hundred.
## Research the provider
Look at the ETF provider's fee structure, whether it's actively or passively managed, and analyst ratings that reveal efficiency and performance.
## Key takeaway

Gen Z investors are flooding themed ETFs with seventy six billion dollars since December twenty twenty-four, but experts say they must diversify themes and avoid duplicating their existing holdings.