ETF Edge

New 'thematic all stars' ETF lets the market have a say in its holdings

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ETF Edge: How best to buy thematic ETFs

One exchange-traded fund provider is looking to take thematic trading to the next level.

Amplify's Thematic All Stars ETF (MVPS) launched July 21 with a mission to aggregate the most popular thematic stocks in the market into one ETF.

Up about 1% since its debut, the fund tracks an index managed by research firm ETF Action, which uses U.S. ETF ownership data to pinpoint the stocks and themes most popular with investors.

The ETF's top 10 holdings are currently Tesla, Nvidia, Square, Amazon, Alphabet, Enphase Energy, Zscaler, PayPal, Microsoft and Twilio. The holdings rebalance every month.

By buying this ETF, investors can rest assured their money is going to the hottest themes in the market, Amplify ETFs founder and CEO Christian Magoon told CNBC's "ETF Edge" on Monday.

"There's about 140 thematic ETFs out in the marketplace today here in the U.S. They own about 3,200 different stocks, so it can be very confusing to understand, what thematic ETF do I buy, how do I avoid pure-play stocks, how often should I rebalance?" Magoon said.

"The thought is this is almost like crowdsourcing a thematic core portfolio allocation from some of the smartest investors in the world, the ETF marketplace, and what they believe are the most valuable stocks and themes to have exposure to," he said.

MVPS' underlying index follows seven themes: disruptive technology; the evolving consumer; fintech; health-care innovation; the industrial revolution; sustainability; and a multitheme category.

Some stocks such as Tesla or Nvidia can be found in multiple themes, so ETF Action adjusts their positions accordingly to ensure that no stock makes up more than 5% of the index or ETF.

"Just owning all the themes is important because if you miss some of the best days in an individual theme, you may never get that back," Magoon said.

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Amplify launches 'thematic all stars' ETF. How the strategy works