April 16, 2026
Our thematic ETF database which powers the research for our sister site, ETF Themes, suggests that the thematic market has become much more selective in the near term. Over the last week, investors have aggressively re-added risk in semiconductors, momentum, clean-energy/grid, climate-transition, biotech, and disruptive-growth ETFs, even as several of the year’s earlier winners—natural resources, legacy energy, REITs, and parts of software—have seen weekly outflows.
That matters because the 1-week tape is now diverging from the YTD tape. YTD flows still show a market that has spent most of 2026 funding income, broad quality/dividend, semis, ESG, software, robotics/AI, uranium, and infrastructure. But the last week looks more tactical: investors are leaning into AI-linked cyclicality and electrification/power themes, while trimming the themes that had functioned as the conflict hedge when Iran risk first hit markets.
The macro backdrop helps explain why. Reuters has reported that the Strait of Hormuz handles about 20% of global oil and LNG flows, and renewed disruptions helped push crude back toward $100 a barrel in April. At the same time, investors have responded to war and inflation fears by driving money-market fund assets to record levels above $8 trillion, a sign that broad risk appetite is still cautious even as selective themes rally.
That combination—macro caution at the top level, selective re-risking underneath—is exactly what the ETFThemes database shows.
The biggest weekly rotation is into semiconductors. The section took in about $4.04 billion in 1-week flows, versus $8.54 billion YTD, making it the clearest near-term leadership group in the file. SMH alone added about $2.28 billion in one week, and SOXX added another $1.53 billion. That is a decisive signal that investors are leaning back into the AI hardware trade. It also aligns with current fundamental newsflow: Reuters reported this week that TSMC raised its full-year revenue forecast to more than 30% growth and lifted capex to the top end of its range, citing “extremely robust” AI demand despite Middle East tensions.
The second major weekly winner is Dividend. The group added about $1.53 billion in 1-week flows and has accumulated roughly $30.17 billion YTD, by far the largest YTD pool of support among thematic sections in the file. That tells investors two things at once. First, the market still wants equity income and balance-sheet quality. Second, the renewed weekly risk-taking has not displaced the broader 2026 preference for durable cash-return stories. It is notable that SCHD pulled in roughly $765 million during the week even though its 1-week return was slightly negative. That is not momentum buying; it is strategic allocation.
The third rotation is into Momentum itself. The section absorbed about $871 million in 1-week flows and $3.28 billion YTD, led by SPMO, VFMO, and XMMO. That suggests investors are becoming more willing to own the strongest tape again, rather than just hiding in cash or low beta. But unlike earlier cycles, today’s momentum trade is not broad-based. It is concentrated in AI, semis, and selected innovation sleeves with fresh price strength.
One of the more interesting changes is the re-acceleration in Climate/Carbon and Clean Energy. Climate/Carbon added about $848 million in 1-week flows despite still being slightly negative YTD, while Clean Energy added another $466 million for the week and sits at roughly $2.43 billion YTD. The standout in the file is GRID, which took in about $399 million in one week and more than $2.57 billion YTD. That is a strong signal that investors are preferring the “picks and shovels” of the energy transition—grid equipment, electrification, and power infrastructure—over more speculative clean-tech beta. It also fits the current macro narrative. The Financial Times recently highlighted how U.S. data-center demand is colliding with limited grid capacity across multiple regions, making power infrastructure one of the critical bottlenecks to the AI buildout.
Biotech and disruptive growth also saw meaningful weekly inflows. Biotechnology added about $335 million in the week, led by XBI, while Disruptive Technology brought in roughly $238 million, with ARKK back in positive weekly demand. These are not the largest flows in the file, but they are important because they show investors reopening the playbook beyond just large-cap AI. The same is true for Robotics & AI, which remained positive both weekly and YTD, though the internals there were mixed: BAI brought in capital, while AIQ saw outflows. That looks less like a rejection of the theme and more like investor preference for certain constructions over others.
Set against those inflows, the weekly selling tells an equally important story.
The largest 1-week outflows came from Natural Resources, which lost about $488 million, even though the group’s average 1-week return was still positive. The biggest drags were SLV, GLD, SILJ, and KOPX. This is a sharp contrast with earlier war-related positioning, when investors had leaned into metals and miners as geopolitical hedges. The message now is that investors are monetizing those trades and reallocating into themes with stronger cyclical and earnings upside.
Legacy Energy also saw net weekly outflows of about $250 million, led by XOP, despite remaining positive YTD. This is especially notable given the still-elevated oil backdrop. It suggests investors increasingly see legacy energy as a tactical hedge rather than the next leg of thematic leadership. The same logic appears in Infrastructure and REITs, both of which remain positive YTD but saw weekly selling. In other words, investors are trimming the slower, more defensive real-asset expressions and moving toward more growth-linked power and compute themes.
The most nuanced rotation may be in Software. The group is still one of the strongest YTD winners, with about $4.70 billion in inflows, but it lost about $385 million in the last week, driven heavily by IGV. That suggests a market distinction between the old software leadership and the new hardware-plus-infrastructure AI stack. Investors still want AI, but increasingly they seem to want the parts of the ecosystem with the clearest revenue acceleration and bottleneck economics.
So what are the major rotations?
The first is a rotation from war hedges into AI cyclicals. Semiconductors, robotics/AI, and disruptive growth are being funded on a weekly basis, while gold, silver, miners, and legacy energy are being faded.
The second is a rotation within the decarbonization complex. Investors are not abandoning clean energy; they are favoring the more pragmatic power-and-grid layer. GRID and transition-related funds are attracting money faster than the more policy-sensitive clean-tech vehicles.
The third is a rotation from broad defensiveness toward selective offense. Record money-market balances show investors still want macro safety. But inside equities, the marginal dollar is moving toward themes with earnings leverage to AI demand and electrification bottlenecks, not just low-volatility shelters.
The bottom line is that the thematic market is no longer trading as though the dominant question is “how do I hedge the Iran conflict?” The 1-week flows say the market has shifted to “what themes can still compound if oil stays high, rates stay sticky, and AI demand remains strong?” Right now, the file’s answer is clear: semis, grid/power infrastructure, dividend quality, momentum, and selected innovation. The old hedge basket—natural resources, precious metals, and legacy energy—is still relevant, but it is no longer where the fresh money is going.
Sources
Thematic flow and performance data sourced from Factset Research Systems Inc.
Reuters on Strait of Hormuz disruption and oil above $100.
Reuters on record money-market fund assets above $8 trillion.
Reuters on TSMC raising its 2026 revenue outlook above 30% on AI demand.
Financial Times on the U.S. power-grid crunch from data-center demand.
