National Bank Investments has added a new twist to thematic investing. The Montreal-based asset manager, which oversees more than $115 billion, launched the NBI Thematic Rotation ETF on the Toronto Stock Exchange this week. The fund, ticker NTHM, does not lock investors into a single hot topic. Instead it rotates among the seven highest-ranked themes drawn from a broad universe of 45 categories.
The strategy relies on a proprietary index called the Thematic Rotation Quality Momentum Screened Index, or TRQMS. Every quarter the index screens 35 VettaFi indexes and ranks themes according to quality and momentum factors. The top seven receive roughly equal weight, between 13 and 15 percent each. At launch the leading themes included E-Sports & Interactive Gaming, Battery Minerals & Raw Materials, Battery Technology & Storage, Semiconductors, Robotic Technologies & Computation, Natural Resources, and Software-as-a-Service.
Technology exposure sits near 40 percent of the portfolio. Materials and resources add another 25 percent. Individual holdings reflect those concentrations. Microsoft, Meta Platforms and Tencent dominate the gaming allocation. KLA Corp. and other chip equipment makers appear in the semiconductor sleeve. The approach gives investors fresh exposure without forcing them to pick individual winners or time entries into narrow funds.
But thematic strategies carry risks. Many have posted strong gains in recent years only to falter when enthusiasm cools. AI-related products soared through 2024 and 2025. Clean-energy and battery plays followed similar boom-and-bust patterns. NBI’s rotation mechanism aims to limit damage from any single theme’s decline. Yet success depends on the quality-momentum screen’s ability to identify genuine shifts rather than chase momentum that has already peaked.
Canadian investors have poured money into ETFs. The industry gathered $20 billion in new assets last year, according to a Financial Post report. That inflow marked the first time ETFs outsold mutual funds since 2009. Banks have responded with a flood of new products. National Bank’s latest batch includes five ETFs and one mutual fund, of which NTHM stands out for its dynamic design.
The launch arrives as thematic investing gains traction globally. BlackRock offers a range of forward-looking funds focused on robotics, semiconductors, electric vehicles and home builders. BlackRock’s thematic ETFs page highlights how these products often ignore traditional sector and geographic boundaries. Upstart issuers have pushed the envelope further. One firm rolled out 35 new ETFs in a single day, many of them thematic or leveraged, Reuters reported just days ago.
Space-themed funds provide another example of rapid investor interest. Inflows reached $1.3 billion in a recent month as anticipation builds for a SpaceX initial public offering. Multiple new products have debuted, each with its own spin on satellites, rockets and related infrastructure. A Reuters article from May detailed how one newcomer gathered more assets in weeks than an earlier fund had in seven years.
NBI’s entry differs by design. Rather than launch a new fund for every promising idea, the rotation ETF adapts inside a single vehicle. New themes can enter the portfolio at each rebalance without requiring fresh regulatory filings or investor capital calls. That flexibility appeals to advisors who want thematic exposure but hesitate to build complicated sleeves across a dozen specialized products.
National Bank’s own website describes the portfolio solutions as offering a built-in edge. The thematic component sits alongside active and index-linked building blocks. Fees for the overall portfolios run as low as 0.25 percent in some configurations. Specific costs for NTHM were not detailed in launch materials. Investors will watch management expense ratios closely. Thematic funds often charge more than plain-vanilla broad-market ETFs.
Early holdings lean toward established technology names and resource companies tied to the energy transition. Battery minerals and technology themes together account for nearly 30 percent at inception. That overlap reflects current market priorities. Electric vehicles, grid storage and renewable integration all require vast supplies of lithium, nickel and copper. Yet those same commodities have swung wildly in price.
The quality-momentum screen attempts to filter out weaker candidates. Exactly how the model weights earnings stability, balance-sheet strength and price trends remains proprietary. NBI has not published the full methodology. Such opacity is common in smart-beta and factor products, but it leaves investors to trust the process.
Broader market conditions could test the new fund quickly. Equity markets posted strong returns in 2024 before turning more volatile in 2025. Inflation concerns, interest-rate uncertainty and geopolitical tensions have complicated forecasts for 2026. Thematic strategies that worked in a bull market for technology may struggle if capital rotates toward value or defensive sectors.
Still, demand for thematic ideas shows little sign of fading. A guide from ETF.com published in May explains how these funds bundle companies positioned for long-term societal shifts. Artificial intelligence, aging populations and the clean-energy transition remain top priorities for many allocators. NBI’s rotation approach attempts to capture those trends while sidestepping the worst of their drawdowns.
Canadian banks have expanded aggressively in the ETF space. Their scale and distribution networks give them an advantage over independent providers. Yet the barrage of new funds has raised questions about product proliferation. Some observers worry that investors may struggle to distinguish meaningful innovation from marketing hype.
NTHM offers one clear point of differentiation. Its quarterly reset provides built-in discipline. Themes that lose momentum drop out. Fresh ideas rotate in. The mechanism echoes tactical asset allocation but applies it at the theme level rather than the asset-class level. Whether that edge proves durable will depend on the accuracy of the underlying model and the persistence of thematic performance spreads.
For now the fund joins a growing list of tools that promise to keep portfolios aligned with tomorrow’s opportunities. National Bank has packaged the concept inside a straightforward equity ETF. Advisors and institutional investors will decide whether the rotation delivers enough incremental return to justify its complexity. The early days will be watched closely. So far the market has rewarded innovation in the thematic category. The question is whether NBI’s version can sustain that momentum through market cycles.
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