Reading a thematic ETF
The name promises a theme. The holdings decide what you bought. The desk measures the gap between the two, and whether the fund has earned its fee against the plain index.
- The difference bar
- One bar per fund on a 0 to 100 scale. Grey is the share of the fund, by weight, in stocks the plain index also holds; violet is the part that is different. The top lane compares with the S&P 500, the bottom with the Nasdaq-100. A fund that is mostly grey is mostly an index fund with a theme on the label.
- In the S&P 500
- The fund’s weight in securities that are also in the S&P 500, whatever the index weights are. The retail question: how much of this do I already own through an index fund.
- Active share
- How differently the money is placed, counting weights: one minus the sum of the smaller weight of each security across the fund and the index. 100% means nothing in common; 0% means the index itself. Two funds can hold the same names and still have a high active share if they weight them very differently.
- Top ten
- The weight of the ten largest holdings. Above 50% the fund is a bet on a handful of companies, whatever the theme.
- Total return and the gap
- Price change with every distribution reinvested, over the window, against the S&P 500 and the Nasdaq-100 measured the same way. The gap is the fund minus the index, in points. Since launch is the honest window for a thematic fund, because most launched near a peak of interest in the theme.
- Below its high
- How far the fund sits below its own all-time high, distributions reinvested. The number a holder feels.
- Holdings as of
- Holdings come from each fund’s latest public N-PORT filing with the SEC, which shows the last month of a quarter and is published about sixty days later. Overlap moves slowly, so the lag matters little, but every card carries the filing date so an old book is never read as today’s.
- Themes
- ETFIQ assigns each fund one theme from its name and holdings. That is an editorial judgment and it says so on Standards. Sort orders on this desk are stated arithmetic; no theme is ranked by opinion.
- Peers
- The funds whose holdings overlap most with this one, by weight. When two funds are more than half the same, holding both is close to holding one of them twice.
- Fee for the difference
- The active expense ratio: the fund’s annual fee divided by its active share against the S&P 500. A fund charging 0.75% that is 45% different from the index charges about 1.67% for the part that is different, because the rest could be owned through an index fund for almost nothing. Fees come from the prospectus XBRL each fund files with the SEC.
Where to next
Definitions as ETFIQ uses them on the themes desk. Every figure on the site is stated arithmetic on published data. Standards and sources