TMX VettaFi Head of Research Todd Rosenbluth discusses thematic ETFs and the implications of VettaFi’s acquisition of RAFI Indices on Schwab Network.
VettaFi’s RAFI Indices Acquisition and Fundamental Shift
On June 11, VettaFi announced the acquisition of RAFI Indices, a deal expected to close in the coming weeks. The acquisition will roughly triple VettaFi’s index capabilities from roughly $90 billion in ETF assets to more than $260 billion while also expanding VettaFi’s lineup of index products.
VettaFi currently has index products tied to ETFs issued by American Century, Victory Capital, and ALPS ETFs, but the addition of RAFI products issued by Invesco and PIMCO that are fundamentally weighted is really exciting, according to Rosenbluth.
“So what we’ve seen is that in this environment that we’re in right now, the market has been rotating. We’ve seen fundamentals play a larger role within index construction, within portfolio construction,” Rosenbluth said.
Funds like the Invesco RAFI US 1000 ETF (PRF ) that track indexes taking fundamentals like valuation and quality characteristics into account instead of just market cap weighting have seen strong returns. Rosenbluth noted that this trend has been seen in some of VettaFi’s pre-existing products, such as the Victory Shares Free Cash Flow ETF (VFLO ). This fund does not own any of the Magnificent Seven stocks but has still outperformed the S&P 500 since its inception roughly three years ago.
Growing Interest in Thematic ETFs
According to Rosenbluth, thematic investment demand has seen significant growth in 2026. “We’ve seen narrower themes that are tied to artificial intelligence be popular, but also strategies that are not directly tied to it,” he said.
He highlighted funds such as the Procure Space ETF (UFO ) — the oldest in its particular niche — and the ROBO Global Robotics and Automation Index ETF (ROBO ), which tracks growth in robotics and automation, as effective ways to gain thematic exposure.
Rosenbluth emphasized that while artificial intelligence (AI) is a significant driver, interest in thematic ETFs extends far beyond it. He pointed to energy infrastructure, noting that the Alerian MLP ETF (AMLP ) offers another avenue for investors seeking thematic exposure.
Strong Appetite for International ETFs
Rosenbluth then discussed how the industry has also seen growing demand for both passive and active approaches that address international markets.
“There [are] a lot of different ways, but it’s important when you’re looking internationally to make sure you know what you’re getting,” he pointed out.
Rosenbluth stressed the need for investors to carefully evaluate the composition of their international holdings. He further explained that because of regional factors, such as the recent political instability in the UK, which can influence returns, it is often wise to consider specialized funds. For instance, investors might look at products that exclude certain markets or focus strictly on specific areas, such as the WisdomTree Europe Hedged Equity Fund (HEDJ ), to ensure that an investment aligns with their specific portfolio objectives.
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vettafi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for VFLO, ROBO, AMLP, and UFO, for which it receives an index licensing fee. However, VFLO, ROBO, AMLP, and UFO are not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of VFLO, ROBO, AMLP or UFO.
