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Investors shouldn’t underestimate the reach of thematic exchange-traded funds, says Jay Jacobs of Global X.

With more than a third of thematic ETFs on the market having launched in the past year and a half, the space is expanding rapidly from its tech-driven roots, said senior vice president and manager. of CNBC’s research and strategy at “ETF Edge” this week.

“I think the mistake some investors might make is to think of thematic investing as just technology,” Jacobs said in Monday’s interview.

Global X’s two fastest growing ETFs this year, US Infrastructure Development (PAVE) and Lithium & Battery Tech (LIT), don’t have much tech exposure at all, Jacobs added.

“I think looking outside the tech in the thematic space has been essential for investors to find this diversification,” he said.

Many top thematic ETFs have been down since the start of the year, so investors should also accept potential risks before buying, said Alex Shepard, founding partner of ETF Action, in the same interview.

“The fact that there can be increased volatility and there could be increased risk is what you’re looking for when looking for above-average returns outside of those broad-based passive indices,” did he declare.

However, new styles of investing could help mitigate that risk like never before, Shepard said.

“Just because the majority of products in the market are considered passive does not mean that they are not actively used around a core position,” he said.

Only about $ 300 billion in assets are following active strategies, Shepard said.

“Ten, twenty years ago, investors and advisers didn’t have the capacity to be creative,” he said. “Now you are looking at almost 2,800 ETFs listed in the United States. They now have the tools to tilt a portfolio one way or another based on their risks, goals, and they never have before. “

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