[Part 14] For 7 months, my thematic investments lost to ETFs — yet I still don't own a single ETF
The essence of thematic investing is to ‘read the big picture of the global economy.’ There was the greatest lesson in reviewing why I lost.
This is the 14th installment of a series based on my (Yuichi KAWANO) investment history, and it is a paid article (¥500).
Introduction ── There Is Not a Single ETF in My Portfolio
It has been 8 years since I started investing. Right now, there is not a single ETF in my portfolio.
Even if you look at my Interactive Brokers account from top to bottom, SPY, QQQ, and VOO are nowhere to be found. What is lined up are all individual stocks that I selected myself.
However, it wasn’t like that from the beginning. When I started investing, I also bought ETFs. It is the classic way to enter, saying “Start with indices.”
From there, I gradually shifted my focus to individual stocks, and before I knew it, ETFs had disappeared from my portfolio.
So, was that choice correct?
This time, using account data as of October 30, 2026, I compared my thematic investment with ETFs (SPY, QQQ, XLE, ITA) over the same period.
The result, honestly, was painful for me.
The “New Defense & Finance On-Chain” theme, which I started on March 25, 2026, was +8.8% in 7 months. Over the same period, the S&P 500 (SPY) was +15.1%, and the NASDAQ 100 (QQQ) was +17.5%.
My thematic investment lost to the ETFs.
This article is written without hiding that loss. And it is an article about why, even after losing, I still hold zero ETFs.
Chapter 1: ETFs and Thematic Investments Are, in the First Place, “Different Products”
ETFs are “Medium-Risk, Medium-Return”
I know the benefits of ETFs well, as I was the one who bought them at the beginning.
-
You can diversify into dozens to hundreds of stocks just by buying one
-
No need for stock selection or checking financial results
-
Low expense ratio (SPY is about 0.09%)
Stock ETFs can also drop 20-30% if the market collapses. Therefore, rather than “low risk,” they are medium-risk, medium-return products.
And, by design, ETFs are products that buy the market average. They won’t lose significantly to the average, but they won’t significantly outperform it either.
Thematic investing is “high-risk, high-return”
Thematic investing has the exact opposite characteristics.
-
Stocks that ride the trends of the times can double, quintuple, or increase tenfold
-
Stocks where your read was wrong will drop mercilessly
I have experienced both. MU (Micron) increased 11-fold, and I sold it according to my rules (Part 6). On the other hand, I cut my losses on KTOS and OKLO.
And this time, I was confronted with the numbers showing that even as a whole, thematic investments can have periods where they lose to ETFs.
High-risk, high-return also means that “there are periods where you lose to ETFs.”
Three Essences of Thematic Investing
From eight years of experience, I have summarized the principles for mitigating the risks of thematic investing into three points.
① Read the big picture of the global economy ② Mitigate risk through stock diversification ③ Don’t chase short-term profits; prepare for the long term
Which of these three did I follow, and which did I fail to follow during this 7-month loss? The second half of this article is for checking those answers.
What I will write from here on (paid section)
-
New Defense & Financial On-Chain 8 Stocks‘ 7-month total performance (total realized and unrealized gains/losses for each stock)
-
CRCL & PYPL obtained via CSP‘s current status
-
AI Power Revolution 5 Stocks‘ 1.5-month performance (this one is beating ETFs)
-
Comparison with SPY, QQQ, XLE, and ITA over the same period
-
Why did I lose? — Breaking down the causes of the loss
-
Comparison with the Defense ETF (ITA) reveals the answer to my “big picture reading”
-
The reason why I still don’t own a single ETF
<Paid section starts here ¥500>