If 2025 rewired expectations — AI mania, a metals surge and record ETF inflows — 2026 looks like the year investors decide whether those trends are durable or just the market getting loud. The narratives are familiar: big-cap tech keeps leading, thematic ETFs keep collecting attention, and some overlooked corners (banks, metals, high yield) are quietly offering alternatives.
S&P ETFs: A balanced way to ride the market
Wall Street’s optimism about 2026 puts the S&P 500 front and center. Large firms are penciling in lofty end-of-year targets, and that’s why core S&P ETFs — VOO, IVV, SPY — remain sensible anchors for many portfolios. VOO, for example, manages roughly $1.5 trillion, charges a tiny 0.03% expense ratio and remains heavily tilted to tech. If you want exposure to the broad U.S. market without betting on a handful of names, these funds do the job cheaply and efficiently.
That said, concentration risk is real: tech and AI megacaps dominate the index’s top holdings. If the AI spending cycle keeps feeding profits, the S&P benefits; if sentiment whipsaws, the same concentration can amplify losses.
AI and semiconductors: thematic gold or froth?
The AI story is the engine behind much of last year’s flows. Thematic ETFs focused on AI and cloud tech pulled in big dollars — roughly $16 billion into thematic ETFs in 2025, with some AI funds like iShares’ active AI vehicle attracting close to $8 billion. Complementing those are semiconductor-focused ETFs (think FTXL, SOXX/SMH peers) that stand to gain if analysts’ calls for a ~30% year-over-year jump in global chip sales play out.
Investors should remember two things: thematic funds concentrate exposure and often trade at higher valuations; and hardware demand (data-center GPUs, edge AI chips) is what ultimately underpins durable revenue growth. That’s why consumer and enterprise hardware trends matter alongside ETF flows — and why Apple’s and Google’s AI moves are relevant. Apple’s shift toward using a custom Gemini model to power Siri, and Google’s push to embed AI into products like Chrome and Maps, feed both software and chip demand. See how Apple’s move to use Gemini and Google’s AI Mode are changing the tech backdrop.
Want a concrete consumer touchpoint? Falling prices and new hardware launches can lengthen replacement cycles and lift margins for chipmakers. Deals on laptops — like the M4 MacBook Air — can be a subtle indicator of the consumer tech cycle; if you’re shopping, the M4 MacBook Air is available on Amazon. For context on MacBook pricing trends, see the recent MacBook Air deals story.
Not all winners are tech: metals, banks and income plays
Commodities had a huge run in 2025. Gold and silver hit records, copper climbed on supply tightness, and industrial metals benefited from both investment demand and real-world industrial use. ETFs such as SLV (silver), CPER (copper), PLTM (platinum) and PALL (palladium) are plausible ways to express that trade, though timing matters — commodities can mean-revert quickly after big rallies.
Banks may be the quiet opportunity. After a multi-year squeeze, improving loan demand, cheaper funding and an easier-but-still-cautious rate backdrop could boost bank earnings. Sector ETFs like KBWB have outpaced the broader market recently, and analysts are framing 2026 as a year where financials can catch up if the macro backdrop cooperates.
For income-hungry investors, high-yield corporate bond ETFs (HYG, USHY) performed well in 2025 — returning near 9% — and still attract attention, though spreads are tight and credit risk shouldn’t be ignored.
Smaller themes: nuclear, robotics, solar and defined-duration ETFs
Thematic niches beyond AI also enjoyed attention: nuclear energy and robotics had standout years, with funds such as NUKZ and ROBO delivering double-digit gains in 2025. Solar and clean-energy ETFs (TAN, PBW) bounced back as panel and battery costs fell and policy fears eased — an AI-driven demand for power is a loosely connected but real tailwind for these sectors.
On the product side of the ETF industry, expect structural change: many firms are converting mutual fund share classes into ETF wrappers, and big asset managers are integrating boutique capabilities (the Goldman–Innovator deal is one example). Meanwhile, money managers are experimenting with liability-driven and defined-duration ETFs that try to match investment horizons to spending needs — a practical innovation for advisors worried about sequencing risk.
What to think about when allocating in 2026
- Diversify: megacaps can power performance, but diversification still reduces idiosyncratic risk.
- Match vehicle to objective: core S&P ETFs for broad exposure, thematic funds for conviction bets, commodity and sector ETFs to hedge cyclical views, and bond/hybrid ETFs for income and risk management.
- Watch flows and fundamentals: big inflows can outpace fundamentals in some thematic ETFs, so check holdings, fees and turnover.
- Mind the macro: rates, geopolitics and fiscal policy will influence bank earnings, commodity demand and sentiment toward growth names.
Markets rarely move in a straight line. 2026 may reward concentrated bets if the AI-capex cycle accelerates, or it may be kinder to diversified portfolios if volatility returns. Either way, a plan that combines broad-market anchors with tactical, conviction-sized sleeves — sized to your risk tolerance — tends to avoid the worst of market fads.
If you’re building a portfolio, think of ETFs as tools: some are sledgehammers (broad market funds), some are scalpels (narrow thematic funds), and using the right mix is what separates a thesis from a hobby.