TOLL Profile
The Tema ETF Trust - Tema Monopolies and Oligopolies ETF focuses on investing in companies operating within markets characterized by high levels of concentration. Specifically, the fund targets firms where the Herfindahl-Hirschman Index (HHI) of the market representing over 50% of their revenue exceeds 2,500, indicating a significant degree of market power and limited competition. The investment strategy aims to capitalize on the competitive advantages and pricing power that often accompany monopolistic and oligopolistic market structures.
Under normal market conditions, the fund commits at least 80% of its net assets inclusive of any borrowings for investment purposes to equities of both domestic and international companies that meet its market concentration criteria. This includes investing in both common and preferred stocks of publicly listed firms that dominate their respective markets. By focusing on high-concentration markets, the fund seeks to leverage the economic benefits associated with reduced competitive pressures and higher profit margins.
The ETF employs a non-diversified strategy, concentrating its investments in a select group of companies operating in industries with substantial market dominance. This approach allows for a targeted exposure to sectors where firms benefit from significant market control, potentially resulting in higher returns compared to a more broadly diversified portfolio. The funds focus on monopolistic and oligopolistic markets reflects its strategy of investing in companies with strong market positions and pricing power.
Managed by Tema ETF Trust, the fund utilizes a quantitative approach to identify and invest in companies within highly concentrated markets. This strategy is based on the premise that firms operating in such markets often enjoy competitive advantages that can lead to superior financial performance. The ETFs objective is to provide investors with exposure to high-market-power companies that are well-positioned to benefit from reduced competition and increased profitability.
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