European thematic investing is growing at a record pace, yet according to the latest study by WisdomTree, retail investors lack confidence in their own ability to navigate this space. Assets in European thematic funds and ETFs reached $422.4 billion in June, but fewer than four out of ten savers or investors feel confident in their ability to identify which theme might outperform over the next five years, according to WisdomTree.
In the view of Pierre Debru, Head of Research, Europe, WisdomTree, that uncertainty appears well founded. “Half of those surveyed believe that themes will take turns performing well, reflecting the reality that thematic leadership rotates over time. This is evident in recent years’ performance, where this rotation has been observed. In 2024, the top-performing theme was ‘Heightened Tensions,’ driven by rising geopolitical friction and increased defense spending,” WisdomTree adds.
In 2025, it was “Strategic Metal Mining Companies,” fueled by the imbalance between stagnant critical mineral supply and rapidly accelerating demand linked to artificial intelligence developments, rising defense investments, and power grid infrastructure upgrades. Furthermore, the firm highlights that in the first half of 2026, “Semiconductors” took the top spot, demonstrating how quickly thematic leadership can shift.
With more than 50 themes available to invest in, choosing the right one is inherently difficult, as explained by the firm, since the issue does not necessarily stem from a lack of understanding or conviction. The survey suggests that European savers already recognize many of the structural trends shaping the global economy, with renewable energy leading as the most likely investment option to hold over the next five years, while one in three believes AI software will gain importance as an investment theme during that period.
Diversification Could Help Uncover the Mega-Caps of the Future
If investors struggle to identify tomorrow’s winning theme, WisdomTree suggests that the solution may not be picking just one. “In the 1990s, it was clear that the Internet would change the world. What was much harder to predict was that Amazon would survive while Yahoo did not. The same dynamic applies to thematic investing today. Identifying a theme with long-term potential is one thing. Knowing how to access those themes through a diversified approach is entirely another, and it increases the chances of landing on tomorrow’s ‘Amazon,'” the company explains. They add that investing in a multi-thematic ETF or fund could reduce the likelihood of missing out on future mega-cap companies, which might emerge from undervalued themes such as quantum computing, the space economy, or physical AI.
The growth of thematic funds is encouraging, but it tells only part of the story in Europe, according to WisdomTree. Retail investors believe in certain themes, yet many still lack the confidence required to act on them. As thematic investing continues to evolve, a diversified, multi-thematic approach could help bridge that gap.
