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5 min by Anna Nerys, Product Strategist for Thematic Active ETFs at BlackRock Inc. Jun 30, 2025

Thematic investing identifies themes changing the world and seeks companies positioned to benefit.

Key takeaways:

  • Mega forces drive long-term investment opportunities – Mega forces, like demographic changes, AI, energy transition, and others are big, structural changes that affect investing now - and potentially in the future.

  • In our view, modest interest rate shifts could support rate sensitive assets – The potential for additional cuts in 2025 could support non-cash-flowing assets like bitcoin, gold, and even biotech stocks.

  • Artificial Intelligence (AI) remains a transformative force – Continued investments in AI infrastructure suggest the potential for long-term growth, despite short-term volatility.

  • Role of thematic investments in portfolios – Thematic ETFs seek to offer exposure to unique return opportunities not captured in traditional sector-based or country-based investments and may expand a portfolio manager’s toolkit for potentially delivering long-term alpha.

Thematic Investing and Mega Forces

At any given time, powerful trends are shaping markets, consumer behaviour, businesses, and government agendas. These long-term structural trends, often referred to mega forces, focus on investing in companies positioned to benefit from major shifts in society, technology, and the economy.

Some of these broad, transformative forces reshaping industries and economies can be categorized accordingly:

  • Demographic divergence: Split between aging advanced economies and younger emerging markets with different implications.

  • Digital disruption and AI: Technologies transforming how we live and work.

  • A fragmenting world: Globalization is being rewired as the world splits into competing blocs.

  • Future of finance: Fast-evolving financial architecture.

  • Transition to a low-carbon economy: The transition is set to spur a massive capital reallocation as energy systems are rewired.

Three Key Investment Themes for 2025

Looking ahead, we think these three major themes could define market opportunities.

  1. Modestly Lower Interest Rate Environment

    With expectations of potential rate cuts in the U.S. and Canada by the end of 2025, we believe that certain asset classes may benefit. Non-yielding assets like gold and Bitcoin often perform well when the opportunity cost of holding them declines.1 Additionally, rate-sensitive areas of the market such as biotech stocks could see positive momentum as borrowing costs decrease. Such innovation couldn’t come at a more critical time; ageing populations, particularly in developed markets, are bolstering demand for many drugs and treatments in categories that disproportionately impact seniors. 2

  2. Physical Economy Growth: Infrastructure & Housing

    The U.S. is seeing increased investment in infrastructure, manufacturing, and home construction due to factors like policies aimed at reshoring and a housing supply shortfall. Reshoring — or the act of bringing manufacturing back to domestic soil — gained prominence during the pandemic when global trade was severely impacted by supply chain bottlenecks. By increasing domestic production and shortening supply chains, governments and companies can exert more control and reduce risk over previously complex and fragile systems. With 5–8 million homes needed to meet demand, we believe that sectors related to homebuilding and infrastructure could offer strong investment opportunities. 3

  3. AI Expansion: Building the Digital Future

    AI continues to evolve, with significant investments being funneled into data centres, energy infrastructure, and computing power. The AI industry is still in a ‘build phase’, requiring robust infrastructure to support growing computational demands. By 2030, an estimated US $700 billion per year may be spent on AI-related infrastructure, highlighting significant investment potential. 4

Why these themes matter

How these mega forces influence different sectors. For example:

  • The aging population is driving demand for healthcare innovations like biotech and pharmaceuticals. 5

  • Geopolitical fragmentation is altering supply chains, potentially making resilience a priority over cost efficiency.

We believe that Thematic exposures can offer a significant opportunity to enhance performance potential in a risk-managed way. Thoughtfully integrating thematic exposures allows investors to seek unique and diversified sources of risk and potential return tied to structural growth trends. We believe thematic investing holds enduring value in helping investors seek to achieve their financial goals.

As the world evolves, so should investment strategies. By understanding thematic investing and how it focuses on macro-level trends, investors can position their portfolios to seek to capitalize on long-term structural changes shaping the future.

1. Based on negative asset price correlations with the 5-year U.S. Treasury TIPS yield. Gold: Bloomberg Gold Spot Price. Bitcoin: Bloomberg Bitcoin Spot Price. Correlation: 3-year correlation based on weekly return data for the past three years. Correlation between TIPS and Bitcoin: -0.21; TIPS and Gold: -0.35. Source: Bloomberg, St. Louis Fed, and BlackRock. Data as of April 30, 2025.
2. Source: 20% of the U.S. population will be +65 years by 2030, per World Bank data and estimates, current as of April 30, 2023. People spend 3x more on healthcare when +65 years vs <65 years, per Deloitte 2019 Outlook for Healthcare. Some of the diseases that disproportionately impact seniors include: Alzheimer's disease and dementia, diabetes, hypertension, etc. per NCOA, “The Top 10 Most Common Chronic Conditions in Older Adults,” May 2024.
3. Realtor.com, “U.S. housing supply gap grows in 2023; growth outpaces permits in fast-growing sunbelt metros,” 2/27/2024.
4. Source: BlackRock Investment Institute, Reuters, November 2024. Based on capital expenditure by big tech on data center related projects and the estimated range of spending derived from industry estimates of data center power demand and the estimates of data center costs, including chips. “Big tech” includes: Amazon, Apple, Google, Meta, Microsoft and Oracle. This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy.
5. Source: Seniors spend 3x more on healthcare versus those under the age of 65, per Deloitte 2019 Outlook for Healthcare.
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Disclosure

Date of publication: May 26, 2025



Investing involves risk, including possible loss of principal.



The RBC iShares alliance includes RBC ETFs managed by RBC Global Asset Management Inc. and iShares ETFs managed by BlackRock Asset Management Canda Limited.



Commissions, trailing commissions, management fees and expenses all may be associated with investing in exchange-traded funds (ETFs). Please read the relevant prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. ETFs are not guaranteed, their values change frequently and past performance may not be repeated. Tax, investment and all other decisions should be made, as appropriate, only with
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