(Bloomberg) — Wall Street traders may be embracing futuristic technologies this year, but an old-school bet on the economy is still thriving in the world of ETFs: industrials.

The federal government is embarking on a long-term project to increase US self-sufficiency while also combating climate change, and US businesses are looking to strengthen domestic supply chains in the wake of the pandemic. Add in geopolitical pressures, combined with growing demand for new energy infrastructure, and the entire industrial sector is being rebooted. That's prompting investors to sink their capital into industrial ETFs across the board, even in the midst of a slowdown in manufacturing activity and questions about demand for goods from US consumers.

Best example: The Global X US Infrastructure Development ETF (PAVE) has dethroned Cathie Wood's ARK Innovation ETF (tickker ARKK)—a poster child for the innovation-based investment thesis—as the largest thematic fund. The U.S. infrastructure product from issuer Global X stands at $7.5 billion in assets after adding nearly $1.5 billion this year, according to data compiled by Bloomberg. ARKK, thanks to quarterly outflows so far this year, now holds about $5.2 billion in assets. He started the year with nearly 9 billion dollars.

A number of recent launches have also focused on the industry theme, with Global X debuting an infrastructure fund under the code IPAV, which excludes US firms. Meanwhile, BlackRock launched the iShares US Manufacturing ETF ( MADE ) in July and Tema released its American Reshoring ETF ( RSHO ) in May of last year.

It underlines how traditional real-economy bets are still in demand, as traders have less appetite for the once-alluring investments in disruptive but largely unprofitable tech companies favored by Cathie Wood.

A dismal performance by tech-focused thematic funds — including ARKK — has helped push investors toward industry-focused ETFs, says Todd Sohn, an ETF strategist at Strategas.

“Infrastructure and industrial-type funds may have a longer lifespan as a theme play,” he said. “Also, industries as a sector are very diverse, so playing more focused tracks, such as infrastructure or restructuring, makes sense and adds to the longevity of the theme.”

Among thematic ETFs tracked by Bloomberg, PAVE has seen the largest inflows this year, with about $1.5 billion. The fund is loaded with industrial powerhouses like Parker-Hannifin Corp., United Rentals Inc. and Norfolk Southern Corp. In second place is the First Trust NASDAQ Clean Edge Smart Grid Index Fund (GRID), which has more than half of its holdings falling under the “industrial” label. It received $667 million in 2024. Other standouts in the top-10 list of inflows are RSHO, with $83 million, and the iShares US Infrastructure ETF (IFRA), which received $78 million. dollars.

ARKK, on ​​the other hand, is on pace for its third straight quarterly outflow, the worst string of outflows since early 2014, according to data compiled by Bloomberg. With $2.4 billion left this year, it's on pace for its worst year ever. Other funds in the Ark lineup have also suffered: ARK Next Generation Internet ETF (ARKW) and ARK Genomic Revolution ETF (ARKG) have each exited more than $400 million, while ARK Fintech Innovation ETF (ARKF) and ARK Autonomous Technology & Robotics ETFs (ARKQ) have seen outflows of about $300 million each.

That's not to say investors don't have an appetite for tech exposure — the biggest behemoths have famously outperformed the market this year. It's the unprofitable or highly speculative technology bets that many have left recently, given their recent poor performance. An index of not-for-profit technology firms is down more than 13% this year, compared with a 10% gain in the Nasdaq 100.

“Investors tend to go for more tangible investment ideas when there is more uncertainty in the market and less money to allocate,” said Roxanna Islam, head of sector and industry research at TMX VettaFi. “Industrial themes such as infrastructure and restructuring may offer a relatively safer growth story than disruptive technology funds such as ARKK, which have recently become more associated with risk than return.”