How to Invest in Pets, Caffeine, and Death

In a symphony, a motif is a bit of music that keeps popping up. A Silicon Valley-based startup wants to turn “motif” into a financial tool. Motif Investing offers collections of investments that exploit a particular theme. If you want to invest in the aging of the baby boomers, for example, you can buy Rest in Peace, made up of hospice and funeral-service stocks. If that’s too depressing, buy Caffeine Fix, comprising a dozen makers of coffee, soda, and energy drinks. There are motifs called Cyber Security, Battling Cancer, Rising Interest Rates, and thousands of others on the company’s site.

Each motif can hold as many as 30 stocks or exchange-traded funds (ETFs), and each is available for a $10 commission—no matter how much money you put in. Is this a smart way to invest? Most experts say no. “For the vast majority of investors, speculating on themes is not a good idea,” says Brad Barber, a finance professor at the University of California at Davis. Among economists responding to a 2013 University of Chicago survey, 96 percent agreed investors do better with passive investments—diversified, low-cost index funds—than by picking stocks themselves.