Are Thematic Equity Products on the Cusp of Tech Disruption? (Portage)

Summary

• SpaceX carried the largest IPO valuation by far at around $1.75 trillion, implying roughly 95x revenue.p.1
• About 30% of SpaceX's free float will be passively owned within 15 days of trading, versus roughly 4% under the old rules.p.1
• Global ETF assets under management grew from roughly $1.3 trillion in 2010 to $22.1 trillion.p.2
• US-listed ETFs hold ~67% of global ETF AUM.p.2
• US equity ETFs took in $3.6 trillion of net inflows since 2010, compared with $3.8 trillion of net outflows in US equity mutual funds.p.2
• Average fees of broad-based equity ETFs decreased from 21 basis points in 2017 to 14 basis points in 2025.p.2
• Thematic ETF fees of up to 75 basis points felt reasonable when replication was costly and complex.p.3

Key insights

1. SpaceX fast-tracked its entry into the Nasdaq-100, FTSE Russell and MSCI indices, which is historically unprecedented.p.1
2. Broad-based ETFs remain the dominant category of the US ETF market at $5.2 trillion.p.2
3. SPY and VOO at ~3 to ~9 basis points of fees remain remarkably good products for US large-cap exposure.p.2
4. AI and direct indexing platforms are collapsing the cost, brand-trust and liquidity pillars that protected thematic ETFs.p.3
5. Platforms like Tilt charge no management fees and offer personalization and tax-loss harvesting at the individual position level.p.4
6. Consumers and distribution platforms win from direct indexing, while thematic ETF manufacturers and niche index licensors lose.p.6
7. Large-cap broad-based index providers are expected to survive because the cost efficiency of VOO or SPY is hard to replicate.p.6