Through the Systematic Lens: Thematic Equity: Factor Landscape (August 2026)
“The trend is your friend, until it bends,” Ed Seykota (1995)
“Opportunity always knocks at the least opportune moment.” — Murphy’s Law
This is our inaugural piece where we apply a systematic/factor-based lens to the thematic investment landscape, focusing on fund exposures to common risk factors such as growth, value, momentum, quality, and volatility. Rather than judging a theme on narrative or recent performance alone, this systematic lens helps identify where investor sentiment may be building or recovering and the underlying risks expected to contribute to future volatility. Below, we review the broader factor backdrop across U.S. equities, then turn to this month’s Top Trending Themes (by Bloomberg Momentum factor), highlighting the Global X AI Semiconductor & Quantum ETF (CHPX), and the Most Out-of-Favor themes, highlighting the Global X Hydrogen ETF (HYDR).
For the month ending 7/31/2026, defensive and value factors (Bloomberg Dividend Yield, Low Volatility, and Value style factors) led Bloomberg U.S. equity universe factor performance, overtaking the growth/momentum regime that had driven the market’s recovery from the Q1 2026 U.S./Iran-conflict sell-off.1 Following an unusually strong period of performance from market leading stocks (as measured by the S&P 500 Momentum Index), the U.S. equity market, as defined by the S&P 500, saw sharp reversals as technology leadership gave way to defensive sectors such as healthcare and financials.2,3
Trailing three-month performance masks this churn: the Bloomberg Momentum Long/Short Sector-Neutral factor suffered a severe peak-to-trough sell-off before recovering late in July.4 The reversal extended beyond semiconductors to the broader AI-adjacent complex — infrastructure, alternative energy, rare earth miners, suggesting a shift in sentiment rather than a fundamental deterioration.5
We believe the fundamental backdrop for pro-cyclical leadership remains intact (see the Global X 2026 Mid-Year Outlook), so this pullback in growth and sentiment factors may be a healthy correction after an exceptionally strong run for Momentum. If the AI-led pullback persists, however, leadership could rotate further toward the value-oriented segments that have lagged over the past year, Bloomberg Dividend Yield and Value have already outperformed Growth, Quality, and Estimate Revisions year-to-date 2026 through 7/31/2026.
Note: all factors referenced in this article are defined by Bloomberg unless stated otherwise.
Defensive and Value Factors Led in July; Momentum and Estimate Revisions Topped the Trailing One-Year Period
Key Takeaways
Momentum continued to dominate U.S. equity leadership despite its sharp pullback, as the market has broadly followed earnings higher. One may consider taking at least a neutral stance on Momentum, with an eye toward oversold themes whose growth fundamentals remain intact.
Future tech, AI-adjacent computing, metals producers, genomics, and energy storage/climate technology comprise our Top Trending Themes; we highlight the Global X AI Semiconductor & Quantum ETF (CHPX).
Energy storage, alternative energy, environmental, and genomics themes remain our most Out-of-Favor Themes (those that have lagged the broader market over the past four to five years) but show signs of recovery based on recent Momentum; we highlight the Global X Hydrogen ETF (HYDR).
Among the Top Trending Themes, AI-adjacent and future-tech may benefit from positive growth factor exposure; precious metals miners may benefit from both growth and value factor exposures.
As of 7/31/2026, we observe five thematic categories comprising the Top Trending list, as measured by the Bloomberg Momentum Factor. These themes have enjoyed positive pricing trends signaling strong investor demand.
Future Tech, such as space technologies (ORBX), has enjoyed a halo effect from the SpaceX IPO that occurred in June 2026. The theme has strong growth prospects (positive Growth exposure) but is also expensive (negative Value exposure) and exhibits less financial strength and stability (negative Quality exposure). Recent selling pressures (as indicated by the 14-Day Relative Strength Index (RSI) as of 7/31/2026) may have become overextended after sentiment turned sharply negative from its late-May highs.
Artificial Intelligence (AI)-Adjacent themes representing computing bottlenecks such as AI semiconductors/quantum (CHPX), along with critical inputs needed for capital spending on infrastructure / advanced devices such as rare earths and critical materials (EART), hydrogen (HYDR), and copper miners (COPX). As with space technologies, some of these themes (CHPX, HYDR) trade at expensive valuations (negative Value exposure), implying that the market is assigning more of the current valuation to future growth. We believe the structural growth narrative remains intact given the strong AI and broader infrastructure capital expenditure cycle. Several of these themes have experienced recent selling pressures (as indicated by the 14-Day RSI through 7/31/2026) and may have become overextended; we discuss semiconductors (CHPX) below in our highlighted Top Trending Theme.
Precious metals mining and/or exploration themes (such as GOEX) may face headwinds if rising inflation expectations prompt a hawkish monetary policy pivot from the Federal Reserve, favoring fiat currency over alternatives like precious metals and digital assets. Still, strong earnings growth and reasonable valuations may help buffer any such shift.
Energy Storage (LIT) and Climate Technology (CTEC) have benefitted from conventional energy supply constraints, as industrial users seek alternatives and producers pursue efficiency and storage incentives; both also appear on the Long-Term Reversal list below as these themes appear to be recovering from long-term underperformance versus the broader market. Autonomous and electric vehicles (DRIV) benefitted similarly from the search for transportation fuel alternatives.
Genomics (GNOM) rounds out the list, with renewed interest driven by AI’s transformative potential for gene therapy, drug discovery, and personalized medicine; it also appears on the Long-Term Reversal list below as this theme appears to be recovering from long-term underperformance versus the broader market.
Top Trending Theme in Focus: AI Semiconductors/Quantum Computing
This month we apply a factor lens to the Global X AI Semiconductor & Quantum ETF (CHPX); our most recent writeup on the theme came be found on our website. Here is the summary of the structural thesis:
AI is driving a fundamental restructuring of semiconductor architecture; specialized GPUs, ASICs, high-bandwidth memory, and ultra-fast networking are becoming the indispensable building blocks of next-gen computing. This demand for high-performance computing could influence trillions of dollars in computing infrastructure spending by 2030.6 CHPX tracks the Global X AI Semiconductor & Quantum Index, comprising companies providing computer hardware, infrastructure, and quantum technologies powering the next generation of AI and advanced computing.
The charts below examine the fund’s current factor exposure and fundamental/pricing trends. Funds with under one year of history (like CHPX) are only shown with current factor exposure.
Despite the sector’s historically cyclical behavior, AI-driven demand for memory and compute has outpaced supply, pushing it into a secular growth phase.8
As a result, the fund shows strong Growth and Quality factor readings.
However, the segment remains more volatile than the broader universe given its cyclicality, and traded at higher valuations versus its own history (see the index valuation chart below).
CHPX has positive exposure to Growth and Momentum but shows elevated Volatility and is marginally expensive (negative exposure to Value).
Forward Earnings Per Share (EPS) estimates for the underlying constituents in the Global X AI Semiconductor and Quantum Index (GXCHPXUN), the tracking index for CHPX, have accelerated as analysts keep raising estimates, yet the index traded at a lower Price-to-Earnings (P/E) ratio than a year ago, as earnings have grown faster than stock valuations have risen.
Forward EPS kept climbing as the forward P/E compressed; earnings growth, rather than multiple expansion, has driven higher valuations.
After peaking in mid-May, the fund has experienced recent selling pressures (as indicated by the 14-Day RSI through 7/31/2026) and may have become overextended, even with the current price still well above its 200 moving day average. A shift in risk appetite for the AI buildout could trigger a pullback, but “buy-the-dip” demand may persist if the intermediate positive pricing trends and underlying fundamentals hold.
Overall, the semiconductor/quantum computing theme has benefitted from a combination of positive price trends and strong growth fundamentals.
Price was well above intermediate support (200-Day Moving Average); the RSI pullback suggests consolidation within an intact uptrend.
The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. Performance current to the most recent month- or quarter-end is available here.
Most alternative energy and climate technology themes appear to be recovering from long-term underperformance (Long-Term Reversal) based on recent positive Momentum.
This month’s Top Out-of-Favor list, as measured by the Bloomberg Long-Term Reversal Factor, spans four categories. Many of the underlying securities held in these themes have underperformed over the past five years as investors moved on from the promising growth potential they once exhibited, though several are now showing signs of recovery.
Alternative energy inputs/processing, such as Renewable Energy Producers (RNRG), U.S. Natural Gas (LNGX), Hydrogen (HYDR), Lithium & Battery Tech (LIT) and climate technology (CTEC), make up the bulk of this month’s out-of-favor list, but have also enjoyed recent price recoveries (Momentum) as the Iran-driven energy squeeze and AI data center buildout renew interest in alternative energy. We profile the hydrogen theme (HYDR) as this month’s Out-of-Favor Theme in Focus.
The genomics and biotechnology theme (GNOM) has long been out of favor but has seen renewed interest as AI advances gene therapy and drug discovery.
Defensive-oriented dividend payers (DIV, QDIV) and free cash flow generators (FLOW) remained out of favor amid strong “risk-on” appetite and an optimistic earnings-growth outlook. A shift away from pro-cyclical leadership would likely be the catalyst for a turnaround, and low valuations (Value) may offer support for patient investors.
Food-innovation and agricultural tech theme (KROP) remained out of favor as earnings normalized from the post-Russia/Ukraine hypergrowth period and tracked lower grain and soybean prices. We view the theme as attractively valued but in need of a growth catalyst.
Out-of-Favor Theme in Focus: Global X Hydrogen ETF (HYDR)
In this section, we’re applying a factor lens to the Global X Hydrogen ETF (HYDR). There have been some recent developments summarized here:
Global investment in green hydrogen has surpassed $110 billion, as of September 2025, backing over 500 projects already operating, under construction, or past the final investment decision stage.8 Committed production capacity exceeded 6 million tonnes per year, with 1 million already operational. The broader pipeline suggests potential for 9–14 million tonnes by 2030. China leads with $33 billion in committed investments, followed by North America at $23 billion. Europe ranks third at $19 billion, though it is forecast to account for nearly two-thirds of global hydrogen demand by 2030. Amid this growth, about 50 weaker projects have been cancelled from 2023 through 2025 signaling an industry shifting from early enthusiasm toward execution. While some projects may not reach final development stages, the robust pipeline and advancement of more than 500 projects point to the growing opportunities within the hydrogen industry.
Here we review HYDR’s factor exposure and fundamental / pricing trends:
Environmental themes like alternative energy and climate technology have fallen out of favor in recent years10 amid declining ESG (Environmental, Social, Governance) mandates, softer EV demand11, and lower baseload needs from unconventional fuels, reflected in HYDR’s negative Long-Term Reversal exposure.
Improved battery storage, surging AI data center power demand, and Iran-conflict-driven conventional fuel shortages are now fueling an alternative energy comeback, reflected in HYDR’s positive Momentum reading.
These fundamental tailwinds have also lifted HYDR’s Growth factor exposure relative to its own history.
Still, the theme trades largely on future prospects, the segment remains unprofitable (see below), with high valuations and weaker financial quality reflected in its Value and Quality factor scores.
HYDR has become less volatile (Volatility, 30-Day Idiosyncratic Return) as Growth improved but remains expensive and more speculative (negative Value, Quality) versus its history
Estimated earnings for the underlying constituents of the Solactive Global Hydrogen Index (the tracking index for HYDR) have improved, though the underlying constituents of the index remained unprofitable. As of 7/31/26, it traded at a higher forward Price/Sales multiple than in recent history, reflecting improving prospects, and room to grow into that valuation should commercial scale economics materialize.
Forward EPS for the Solactive Global Hydrogen Index has improved despite constituents having ongoing operating losses, while the Price/Sales ratio for the index has slowly expanded.
After rallying sharply through May 2026, HYDR has experienced recent selling pressures (as indicated by the 14-Day RSI through 7/31/2026) and may have become overextended. As with other technology-adjacent themes, it remains susceptible to a broader shift in risk appetite or the AI infrastructure narrative.
The hydrogen theme is enjoying an improving investment outlook: HYDR potentially offers high operating leverage to more widespread adoption, may be emerging from a long period of underperformance (as indicated by Long-Term Reversal and recent Momentum for the period ending 7/31/2026), and should benefit from an improving growth outlook over the next decade.
HYDR’s price has mostly trended higher than its 200-day moving average although it broke the trendline in the most recent pullback. The RSI points to oversold conditions.
The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. Performance current to the most recent month- or quarter-end is available here.
Conclusion
We believe a practical starting point for building a thematic equity portfolio is a core group of funds spanning a broad cross-section of themes, with opportunistic allocations to out-of-favor or underappreciated themes.
For themes with positive price trends, consider future tech and AI-adjacent themes (ORBX, CHPX) and critical inputs (COPX, EART, HYDR). Precious metal miners and/or explorers (such as GOEX) remain pressured by inflation and rate uncertainty but could see better entry points if inflation eases. We highlighted CHPX as a Top Trending Theme following July’s tech sell-off.
For out-of-favor themes showing recent recovery, consider alternative energy and environmental technology (HYDR, LIT, RNRG, CTEC) and life sciences (GNOM). Defensive, dividend- and cashflow-focused themes (DIV, QDIV, FLOW) and food innovation/ agriculture tech (KROP) remained out of favor but could turn if sentiment shifts defensive. We highlighted HYDR as a Top Out-of-Favor Theme given its improving growth prospects.
A Global X Brasil Gestora de Investimentos Ltda. (“Global X Brasil”) é uma gestora de recursos de valores mobiliários autorizada pela Comissão de Valores Mobiliários (“CVM”), constituída na forma da Resolução CVM n° 21/2021. Investir envolve riscos. O material deste site destina-se apenas a fins informativos e não constitui conselho de investimento, recomendação, oferta ou solicitação para comprar ou vender quaisquer valores mobiliários, fundos ou estratégias a qualquer pessoa em qualquer jurisdição na qual uma oferta, solicitação, compra ou venda seria ilegal sob as leis de valores mobiliários de tal jurisdição. As opiniões expressas estão sujeitas a alterações sem aviso prévio. A confiança nas informações contidas neste material fica a critério exclusivo do leitor. Nenhum regulador de valores mobiliários confirmou a precisão de qualquer informação aqui contida. O acesso às informações neste site ou o uso dos serviços ou informações aqui fornecidos é proibido por qualquer pessoa ou entidade em qualquer jurisdição ou país onde tal distribuição ou uso seja contrário à lei, regra ou regulamento local. O investimento em fundos de índice envolve riscos, inclusive de descolamento do índice de referência e relacionados à liquidez das cotas no mercado secundário. Os fundos de investimento geridos pela Global X Brasil utilizam estratégias que podem resultar em significativas perdas patrimoniais para seus cotistas. A Global X Brasil, seus sócios e funcionários isentam-se de responsabilidade sobre quaisquer danos resultantes direta ou indiretamente da utilização das informações contidas neste site.
PARA AVALIAÇÃO DA PERFORMANCE DE UM FUNDO DE INVESTIMENTO, É RECOMENDÁVEL A ANÁLISE DE, NO MÍNIMO, 12 (DOZE) MESES. FUNDOS DE INVESTIMENTO NÃO CONTAM COM GARANTIA DO ADMINISTRADOR, DO GESTOR, DE QUALQUER MECANISMO DE SEGURO OU FUNDO GARANTIDOR DE CRÉDITO – FGC. INVESTIMENTOS NOS MERCADOS FINANCEIROS E DE CAPITAIS ESTÃO SUJEITOS A RISCOS DE PERDA SUPERIOR AO VALOR TOTAL DO CAPITAL INVESTIDO. RENTABILIDADE PASSADA NÃO REPRESENTA GARANTIA DE RENTABILIDADE FUTURA A RENTABILIDADE DIVULGADA NÃO É LÍQUIDA DE IMPOSTOS. LEIA O PROSPECTO, O FORMULÁRIO DE INFORMAÇÕES COMPLEMENTARES, LÂMINA DE INFORMAÇÕES ESSENCIAIS E O REGULAMENTO ANTES DE INVESTIR. DESCRIÇÃO DO TIPO ANBIMA DISPONÍVEL NO FORMULÁRIO DE INFORMAÇÕES COMPLEMENTARES
Ao assinar as atualizações por e-mail, você irá receber perspectivas minuciosamente pesquisadas e comentários sobre as tendências que moldam os mercados globais. Os tópicos podem abranger tecnologia disruptiva, estratégias de renda e economias emergentes.
Aderimos a uma rígida Política de Privacidade que rege o manuseio de suas informações. E você pode, é claro, optar por sair a qualquer momento.
Todos os materiais divulgados são produzidos e de propriedade exclusiva da Global X Management Company LLC (“Global X US”), e fazem referência exclusivamente às estratégias e análises setoriais dos ETFs de gestão Global X US.
Procurar
Selecione Sua Localização
Você Está Saindo Agora do Site Brasileiro da Global X ETFs
Clicar em “Confirmar” abaixo o levará a um site diferente, destinado a jurisdições fora do Brasil. Esses links são fornecidos como uma conveniência. A Global X Management Company LLC se isenta da responsabilidade por informações, serviços ou produtos encontrados nos sites vinculados a este.
O(s) site(s) subsequente(s) pode(m) ser regido(s) por diferentes políticas de privacidade, termos e condições ou restrições regulatórias. Os links para esses sites não se destinam a qualquer pessoa em qualquer jurisdição onde – em razão da nacionalidade, residência ou outra razão dessa pessoa – a publicação ou disponibilidade do site seja proibida. As pessoas a quem tais proibições se aplicam não devem acessar esses sites.
CHPX has positive exposure to Growth and Momentum but shows elevated Volatility and is marginally expensive (negative exposure to Value).
Forward EPS kept climbing as the forward P/E compressed; earnings growth, rather than multiple expansion, has driven higher valuations.
Price was well above intermediate support (200-Day Moving Average); the RSI pullback suggests consolidation within an intact uptrend.
Most alternative energy and climate technology themes appear to be recovering from long-term underperformance (Long-Term Reversal) based on recent positive Momentum.
HYDR has become less volatile (Volatility, 30-Day Idiosyncratic Return) as Growth improved but remains expensive and more speculative (negative Value, Quality) versus its history
Forward EPS for the Solactive Global Hydrogen Index has improved despite constituents having ongoing operating losses, while the Price/Sales ratio for the index has slowly expanded.
HYDR’s price has mostly trended higher than its 200-day moving average although it broke the trendline in the most recent pullback. The RSI points to oversold conditions.
