ETF Edge

Thematic ETFs fall after a hot 2020. What two market analysts see ahead

Thematic ETFs tumble after a hot 2020. Top trades to watch

Some thematic exchange-traded funds are having a tough 2021.

Cloud computing, clean energy and cybersecurity ETFs have tumbled year to date after a strong 2020 fueled by ravenous investor demand for thematic funds.

That demand hasn't gone away, Armando Senra, BlackRock's head of iShares Americas, told CNBC's "ETF Edge" in an interview Monday.

"You may have a little bit of a pullback in performance, but we continue to see the flows" into offerings such as the iShares U.S. Infrastructure ETF (IFRA) and the iShares Self-Driving EV and Tech ETF (IDRV), he said.

"We're not just chasing one-year themes. We're looking for 10-year themes," Senra said, calling thematic investing "a long-term growth story for us and for the industry."

While high-growth tech trades may take a back seat to value-based investments as the economic reopening gets underway, themes do have staying power, Salvatore Bruno, chief investment officer of IndexIQ, said in the same "ETF Edge" interview.

"You can't divorce these thematic strategies from what's going on in the capital markets, but we do think that the opportunity set in thematics is big," Bruno said.

IndexIQ's Healthy Hearts ETF (HART), which invests in health care, fitness and health education companies and donates part of its proceeds to the American Heart Association Social Impact Fund, should benefit from that long-term investor interest, he said.

"We want investors to know that their dollars are doing well for their portfolios but also doing good for society as a whole," Bruno said. "And we think that concept applies to a number of other areas, especially in the social realm, where there are these opportunities to create these types of unique strategies."