Swiss-based multi-asset broker, Swissquote, is announcing today the launch of Swissquote Themes Trading. Similar to exchange-trade funds (ETFs), the new products provide investors the ability to invest for both the short and long-term in niche sectors or macroeconomic themes. Upon buying one of the themes, customers gain exposure to a basket of stocks that compose the underlying investment.
In its initial launch, Swissquote is releasing thirty themes, with more expected in the future. Included in the first batch are portfolios for cyber security, fitness trends, Greek recovery and wind energy. According to Swissquote, the themes will be “market-reactive” and adjusted by the broker’s analysts to changing trends in the global markets and economy.
With the launch, Swissquote is entering one of the most popular investment trends for retail investors. Earlier in the year, it was revealed that inflows of retail investors in ETFs was outstripping that of mutual funds. Among the advantages of ETFs versus mutual funds is their lower fee structure. Beyond just costs, investors have also been flocking towards ETFs because of their diversification.
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ETFs exist for practically every major global index, covering not just equities, but also real estate and currencies. Also available are ETFs for specific sector niches like oil services stocks, financial technology, alternative energy, banks and telecom.
As interest for sector-based securities has increased, it has also led to new products with more flexibility than just fixed portfolio ETFs. A recent example is Motif Investing which allows investors to build their own theme, called a motif. Rather than buy an ETF, investors choose which stocks to include in the motif and how much to invest in total.
Also gaining interest, and similar to Swissquote’s new Themes Trading service, are actively traded ETFs. Among these fairly new products are ETFs that use a systematic approach to adjust the underlying portfolio of the fund or use a portfolio manager who actively manages the holdings.
Investors are looking for opportunities in thematic investing: Peter Rosenstreich
In launching Swissquote Trading Themes, Peter Rosenstreich, Head of Market Strategy of Swissquote stated, “Themes Trading facilitates the decision making process involved in investing. Our experience shows that investors are looking for opportunities in thematic investing in combination with the highest possible transparency.”