When the stock market was chugging consistently higher, it was easy to park your savings in a conventional index fund and harness decent returns. However, 2025 has been anything but consistent, and in such an environment, thematic exchange-traded funds have provided a safe haven from the broader volatility thanks to hyper-focused exposure to specific trends.
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To be clear, it may be rewarding to invest in thematic ETFs at this moment, but such an approach comes with higher risk. When you put all your eggs in one metaphorical basket — whether that’s a single stock, sector or asset class — things can change quickly and turn your significant gains into significant losses without much warning.
But if you are tired of seeing red in 2025, these are the seven best thematic ETFs to buy in 2025 based on the current trends during an otherwise rocky year for stocks:
| ETF | Theme | Assets | Expense Ratio |
| iPath Series B S&P 500 VIX Short-Term Futures (ticker: VXX) | Volatility | $286 million | 0.89% |
| iShares MSCI Global Gold Miners ETF (RING) | Gold | $1.3 billion | 0.39% |
| Global X Defense Tech ETF (SHLD) | Arms/defense | $1.3 billion | 0.50% |
| Real Estate Select Sector SPDR Fund (XLRE) | Real estate | $7.4 billion | 0.08% |
| iShares MSCI Europe Financials ETF (EUFN) | Europe | $3 billion | 0.48% |
| Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF (PDBC) | Commodities | $4.9 billion | 0.59% |
| iShares TIPS Bond ETF (TIP) | Bonds | $14.6 billion | 0.18% |
iPath Series B S&P 500 VIX Short-Term Futures (VXX)
Assets: $286 million Expense ratio: 0.89%
Investors who get a stomachache from watching the ups and downs of the major indexes can get a bit of relief via this ETF, which is a bet on volatility itself. This iPath fund is tied to the CBOE Volatility Index, commonly known as the VIX. Keep in mind that this thematic ETF is built from futures that are tied to the VIX’s measure of S&P 500 options, making it a derivative of a derivative that is complex and hard to predict, as well as a bit costly because of how it’s structured. That said, as a tactical swing-trade or an insurance policy against market mayhem, VXX has a lot to offer, as evidenced by more than 50% returns year-to-date in 2025.
iShares MSCI Global Gold Miners ETF (RING)
Assets: $1.3 billion Expense ratio: 0.39%
There are dozens of gold-related ETFs that are up by more than 10% this year, thanks to both the specific appeal of this alternative asset in 2025 and the general popularity of gold-related funds on Wall Street. But among the many ways to play precious metals, gold miners stand out because of a phenomenon known as “operational leverage.” This is where input costs for operating a mine remain mostly the same, but profits can push significantly higher thanks to better margins driven solely by favorable prices. What’s more, miners can ramp up production at only incremental extra costs for labor and energy, which makes them a great way to play the recent uptrend in gold. With about 40 major miners, including Newmont Corp. (NEM) and Agnico Eagle Mines Ltd. (AEM), RING is up about 50% since Jan. 1 to prove its thematic approach is in favor in 2025.
Global X Defense Tech ETF (SHLD)
Assets: $1.3 billion Expense ratio: 0.50%
Global defense industry spending has grown consistently in recent years, for obvious reasons. Since the 2022 Russian invasion of Ukraine, there has been a steady ramping up of tensions in the Middle East as well as worsening geopolitical relations between America and China. This focused fund has just shy of 40 total holdings, including leading global defense names like Germany’s Rheinmetall AG (OTC: RNMBY) as well as domestic leaders like Northrop Grumman Corp. (NOC) and AI-enabled firm Palantir Technologies Inc. (PLTR). The fund has strong momentum, up about 35% so far this year, and has a theme that is definitely in favor amid global uncertainty.
[The 7 Best Monthly Dividend ETFs to Buy Now]
Real Estate Select Sector SPDR Fund (XLRE)
Assets: $7.4 billion Expenses: 0.08%
Another ETF with an alternative asset flavor is XLRE, which owns the biggest publicly traded real estate stocks in the U.S., including telecom properties leader American Tower Corp. (AMT) and warehouse giant Prologis Inc. (PLD). Real estate has been under pressure in recent years as interest rates — and subsequently, borrowing costs — have steadily increased. But considering how President Trump has threatened to fire the chairman of the U.S. Federal Reserve unless he cuts rates, it’s likely that political pressures plus the very real decay in economic growth brought on by trade uncertainty could result in low interest rates later this year. And like gold, real estate holds a low-risk appeal thanks to its link to tangible assets that have value regardless of the ups and downs of stocks.
iShares MSCI Europe Financials ETF (EUFN)
Assets: $3 billion Expenses: 0.48%
One of the strange ironies of Donald Trump’s trade policies has been the significant outperformance of foreign stocks in 2025 despite a desire to bolster American businesses. There is a wide variety of EU-focused funds that have outperformed as a result, but EUFN stands out thanks to its large amount of assets and its focus on the most established financial leaders on the continent. European policymakers have been quite shrewd about bolstering the strength of their economic union to sidestep external threats, part of a long-term effort that was sparked by the 2016 “Brexit” referendum that forced the EU to contemplate life without a close relationship with London — and subsequently, the rest of the world. It hasn’t been an easy road, but European financials that make up EUFN rank among the top performers of 2025. That includes mainline banks, like Spain’s Banco Santander SA (SAN), along with insurers, like Switzerland’s Zurich Insurance Group AG (OTC: ZURVY).
Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF (PDBC)
Assets: $4.9 billion Expenses: 0.59%
Though there are a lot of terms in its name, the Invesco Optimum Yield Diversified Commodity Strategy No K-1 ETF is pretty self-explanatory when you walk through its title one step at a time. In a nutshell, asset manager Invesco offers this fund to investors seeking a high-yield way to invest in a diversified basket of commodities without extra paperwork, like K-1 tax forms. Diversification into hard assets is attractive these days, as illustrated by the performance of gold and real estate, and a big yield is always attractive in tough times. PDBC holds futures contracts, not physical commodities, but those derivatives are linked to major products, including crude oil, gold, corn, soybeans and sugar. If you want a hedge against inflation with a footprint in raw materials, PDBC is the way to go.
iShares TIPS Bond ETF (TIP)
Assets: $14.6 billion Expenses: 0.18%
Treasury Inflation-Protected Securities are a special category of U.S. government bonds that adjust their principal value based on the rate of inflation. Known as TIPS, this asset is one of the most popular ways to hedge risks in an environment where inflation can erode the value of assets or cause broader market volatility. You can buy TIPS outright, but the iShares TIPS Bond Fund provides a simple one-stop shop for exposure to this asset class — much like other bond funds provide exposure to corporate or conventional Treasury bonds. If inflation is a concern, TIP is a strong option for investors looking to play this theme either as a defensive strategy or as a way to grow their portfolios as other investments break down.
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7 Best Thematic ETFs to Buy in 2025 originally appeared on usnews.com
Update 04/24/25: This story was previously published at an earlier date and has been updated with new information.
