In the world of exchange-traded funds (ETFs), thematic investing has taken on new significance as market participants seek to align future expectations with their portfolios. This unique and sometimes expensive investment strategy merits a proper discussion of its pros and cons. As the name implies, thematic investing is a strategy that seeks to align asset selection with certain social, economic or corporate themes prevalent in society. Some of today’s common investment themes focus on environmental sustainability , social security or technological progress. Investors following a thematic approach would select funds that mirror these themes. Although thematic funds can differ greatly from one another, they all differ from standard ETFs that track benchmark indexes such as the S&P 500 or Nasdaq Composite. In this sense, thematic funds are considered special equity ETFs that are based on a specific strategy index. From the perspective of cost, this also translates into higher fees. As Fidelity notes , the expense ratios of special equity funds are roughly three times higher than the average ETF that follows a benchmark index. To get a sense of some of the more popular investment themes of the past few years, check out: 2018 Investing Themes and 2017 Investing Themes .