The Beautiful, Necessary Death of the Big Idea ETF
I saw the headlines the other day, and I can guess what most people thought. “Fidelity Investments Axes Five Themed ETFs.” On the surface, it looks like a retreat. A surrender. The giant of the industry, with its colossal $16.4 trillion under administration, is shuttering funds dedicated to Digital Health, Sustainability, and Women’s Leadership, according to their official announcement, Fidelity Investments® Announces Liquidation of Five Exchange-Traded Funds. It feels like a quiet admission that these grand, forward-looking ideas just didn’t work out.
But when I read the list of the departed—FDHT, FSBD, FSLD, FSST, and FDWM—I didn’t feel a pang of disappointment. I honestly just sat back in my chair and felt a wave of… relief. It felt like a fever breaking.
This isn’t the death of the dream. It’s the end of the kindergarten version of the dream. And for us to get to the real, world-changing future we all talk about, this had to happen. We’re watching the market shed its skin, and what’s emerging is something far more powerful, integrated, and real. We’re finally growing up.
From Labels to Legends
Let’s be honest with ourselves. For the last decade, we’ve been on a thematic investing binge. The logic was seductive, wasn’t it? You believe in a better, cleaner, healthier, more equitable future, so you buy the ETF with the right label on the tin. It was a way to vote with your dollars, to align your portfolio with your principles. These are 'thematic' ETFs—in simpler terms, investment vehicles built around a big, exciting idea rather than a traditional, boring sector like 'industrials' or 'finance'. They were stories you could buy a piece of.
And what incredible stories they were! A future of predictive medicine and personalized healthcare. A world powered by sustainable energy and responsible governance. A corporate landscape where strong, diverse leadership is the norm, not the exception. I believe in every single one of those futures.
But packaging a revolution into a tidy little ticker symbol is a messy business. You end up with a basket of companies that might fit the theme but lack the fundamental financial strength to perform. The label becomes more important than the underlying value. It’s like trying to build a skyscraper out of beautiful, inspiring blueprints instead of steel and concrete. The vision is essential, but it can’t be the entire structure. What does it really mean for the market when a giant like Fidelity Investments, not some small upstart, decides these specific packages are no longer viable? Does it signal a loss of faith in the ideas themselves?
I argue it signals the exact opposite. This isn't a retreat from these ideals it's a powerful evolution, a sign that sustainability and digital transformation are no longer niche concepts you can just bolt onto a portfolio for a little thematic flair, but are becoming the fundamental, non-negotiable bedrock of every single successful company in the 21st century. We’re moving past the need for the label because the ideas themselves have won. They’re being absorbed into the very DNA of the market.
Think about the dot-com bubble of the late 90s. We saw an explosion of companies built on the idea of the internet. Pets.com. Webvan. Kozmo.com. They were thematic investments in a future of e-commerce. And they failed spectacularly. When their stocks cratered, did that mean the internet was a failed idea? Of course not. It was just the end of the first, clumsy, hype-fueled phase. The crash cleared out the weak ideas and paved the way for the giants—the Amazons, the Googles—who integrated the internet into a robust, sustainable business model.
That’s what’s happening right now. The closure of the Fidelity Digital Health ETF (FDHT) doesn’t mean digital health is dead. It means the best healthcare, technology, and insurance companies are all becoming digital health companies. The idea is so powerful, so essential, that it can no longer be contained in a niche little fund. It has broken free. The same is true for sustainability. The best investments for 2025 and beyond won’t be found in a fund with "Sustainable" in the name; they’ll be the companies that have woven efficiency and long-term thinking into every fiber of their operations, from the supply chain to the balance sheet.
Imagine the trading floor on November 13, 2025. There won’t be a dramatic crash, just a quiet delisting. A few lines of code will execute, and these ETFs will cease to be. But out in the real world, a researcher will be using an AI to model a new protein, a startup will be perfecting a more efficient solar panel, and a newly promoted female CEO will be outlining a brilliant five-year plan. The revolution continues, it’s just not being neatly packaged for us anymore. And thank goodness for that.
It's Time to Invest in Verbs, Not Nouns
For too long, we’ve been investing in nouns: "The Future," "Wellness," "Equality." These are static concepts, labels. But real progress, real value, comes from verbs: building, creating, solving, leading.
The quiet liquidation of these funds is a challenge to all of us. It’s forcing us to do the harder, more important work. Instead of buying a convenient story, we have to look for the companies that are living that story. We have to look past the marketing and dive into the mechanics of a business. Who is actually reducing their carbon footprint, not just publishing a glossy ESG report? Which company is genuinely innovating in patient care, not just slapping "AI-powered" on their old software?
This is where the real excitement begins. We are leaving the world of passive, thematic labels and entering an era of active, substantive analysis. The end of these ETFs is a sign of market intelligence. It's a signal that the easy answers are no longer good enough. The market is demanding more. It’s demanding proof. It’s demanding substance. And that is the most optimistic sign for the future I could possibly imagine.