The PDF version of the May issue of ETFInvestor is now available for download.

If the link above doesn’t work, you can download this month's issue by copying this address into your browser: http://etf.morningstar.com/Newsletter.aspx?download=currentIssue

Thematic funds have a long history—some might say a checkered past. From the very beginning, they’ve been designed to capture investors’ imaginations and their assets, luring them with compelling narratives and the prospect of outsize returns. But most have done a much better job spinning stories than growing investors’ wealth. Investors in these funds are making a bet with long odds and a correspondingly large prospective payout; they would be wise to wager accordingly. In this month’s cover, I touch on these funds’ past and present and consider whether they should have a place in investors’ portfolio in the future.

Here’s a rundown of what else you’ll find in this month’s issue:

• Daniel Sotiroff introduces a high-octane offense into the Defensive Portfolio.
• We spotlight the Factor Portfolio’s equity staples: iShares MSCI USA Multifactor ETF LRGF and iShares MSCI International Multifactor ETF INTF. Both funds will begin tracking new indexes come June 1. We revisited our ratings ahead of the index change and have downgraded our Morningstar Analyst Rating for LRGF from Silver to Bronze. INTF maintains its Bronze rating.
• Ryan Jackson shows just how different seemingly similar thematic funds can be.
• Bryan Armour documents a clear pattern of performance-chasing behavior among thematic fund investors.

Ben