CZAR Profile
The Themes Natural Monopoly ETF is an exchange-traded fund designed to replicate the performance of the Solactive Natural Monopoly Index. This index includes global companies that are considered to possess a substantial competitive advantage within their respective sectors, particularly those operating in industries characterized by natural monopolies. The fund focuses on large- and mid-cap companies that are part of a broader Solactive index dedicated to Developed Markets, meeting specific criteria related to trading volume, free-float market capitalization, and average daily value traded.
The fund's selection process involves a rigorous analysis of fundamental financial metrics to identify companies with significant market power and competitive moats. Key metrics considered include sales, profit margins, return on equity, inventory-to-total assets ratio, and intangible assets-to-total assets ratio. From this analysis, the fund selects the top five firms within each sector that meet these criteria. This approach ensures that the ETF captures companies that not only dominate their markets but also exhibit robust financial health and competitive resilience.
The weighting methodology of the ETF is designed to maintain sector neutrality while reflecting the free-float market capitalization of the index constituents. Each sector is represented equally, with securities weighted in accordance with their free-float market capitalization to ensure balanced exposure across various sectors. This strategic weighting aims to prevent overconcentration in any single sector, providing investors with diversified exposure to leading companies in natural monopoly industries.
Rebalancing of the ETF occurs seven business days following the semi-annual Selection Days held in June and December. This periodic adjustment ensures that the fund's holdings accurately reflect the latest market conditions and maintain alignment with the Solactive Natural Monopoly Index. By continuously updating its portfolio, the Themes Natural Monopoly ETF strives to deliver performance that mirrors its benchmark, providing investors with access to high-quality companies that benefit from competitive advantages and natural market dominance.
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