There are a lot of stories to tell in the ETF ecosystem on a weekly, even daily basis. Still, every so often investors see something and ask: Are we being for real? The ETF industry has seen funds targeting areas ranging from Korean media (the recently shuttered KPOP) to CNBC star Jim Cramer (the now closed LJIM), and plenty in between. Now, VanEck has taken another swing at thematic ETFs — but this time, with an important and intriguing twist.
Key Takeaways:
- VanEck has a new Gen Z and millennial “digital natives”-focused ETF.
- It emphasizes the parts of the digital economy that are natural to those generations and offer some exposure to innovation.
- As a thematic fund, it asks a question — are thematic ETFs still a vibe?
The firm recently announced the launch of an ETF focusing on digital natives, or, as the ETF’s ticker (GENZ) suggests, Gen Z. Including millennials, that group, the firm explained in announcing the fund, grew up with a whole different set of spending habits. For this cohort, online shopping is as natural as making an actual phone call is unnatural.
“Gen Z and younger millennials aren’t adapting to digital, they’re native to it. GENZ gives investors a way to own the infrastructure of their economic lives,” said Nick Frasse, product manager at VanEck, per a release from the firm.
The fund sets itself apart from the KPOPs of the world by choosing a theme that is tied into a key macrotrend: in this case, the digital economy. Where other thematics like KPOP stuck to a narrow, horizontal view, GENZ is riding the digitization of economic activity and may be a solid long-term play.
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Thematics aren’t new to VanEck. The shop has had success with its VanEck Digital Transformation ETF (DAPP ), which has returned 105% over one year according to ETF Database data. It outshines other thematics VanEck already offered, like (ESPO ), the VanEck Video Gaming and eSports ETF.
It breaks down the digital native investing landscape into three segments. First, millennial finances via neobanks, digital payment platforms, and other fintechs. Then, the gig economy and online forums “powering on-demand work” and monetization. Finally, the huge digital sports betting world. Each of those spaces represents innovation that can drive the ETF forward even as time moves on from Gen Z. (Hello, Gen Alpha!)
The Bigger Thematic ETFs Question at Hand
The GENZ innovation also prompts a potentially more relevant question: What really is a thematic ETF? Is AI something as simple as a “theme?” Or is it the biggest story in equities investing in years?
State Street Investment Management, who has its own list of thematic ETFs, found something striking about their performance last year. According to SSIM, thematic ETFs produced “an average return of 24% in 2025, outperforming the S&P 500 by 6.1% — the largest annual outperformance since 2020.” Are thematic ETFs back? Maybe they never left.
Instead of asking “Are thematic ETFs back?” perhaps the real story is how the ETF wrapper — and its streamlining with the 2019 ETF rule — has made discreet, targeted strategies more accessible than ever.
That makes defining them and putting them in a box harder than ever, too — but that may be the point. At their best, thematic ETFs can play starring roles in portfolios. GENZ could be just the fund to epitomize that. The message is clear: Don’t sleep on GENZ.
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