Enabling Better Financial Outcomes

ETFs, or exchange traded funds, share characteristics of both stocks and traditional mutual funds. They are baskets of securities (potentially including stocks, bonds, options contracts, etc.) that trade on an exchange similar to individual stocks. They can be bought and sold at market price throughout the trading day.

Simplicity, tax efficiency, transparency, and diversification are some characteristics of many ETFs that make them appealing to a wide range of investors. For many people, managing a portfolio of individual stocks is too time consuming, and funds that invest in options contracts, bonds, and/or international securities may be too complex or inaccessible for non-professional investors. There are ETFs that may not exhibit all these traits. Please read the prospectus of any potential investment carefully and consider consulting a financial professional.

ETFs provide tax advantages that stem from the way that they're structured, which allows for two main sources of tax efficiency:

1. Externalization: ETFs trade in the secondary market, like a stock exchange, which largely insulates the fund from individual investors’ trading activity. In other words, if an ETF investor decides to sell shares of an ETF, a majority of the time, the transaction will occur in the secondary market, which does not involve any interaction with (or impact to) the fund.
2. In-kind redemptions: When selling activity on an exchange does result in a redemption from the fund, it is usually tax-free to remaining investors. ETFs generally satisfy redemption requests in the primary market through an in-kind delivery of securities to an intermediary (securities rather than cash), which means client redemptions from the fund do not generally create taxable events for remaining shareholders.

Unfortunately, no. ETFs can only be purchased through a brokerage account or a financial advisor. Fortunately, Tema ETFs are available on virtually all major online investment platforms.

We believe thematic investing involves gaining broad exposure to long-term, disruptive trends. These may be driven by technological innovations, changing consumer preferences, or adaptations to the environment. Examples include the rise of artificial intelligence, emergence of E-commerce, or the shift to renewable energy sources. Learn more here.

Index funds are passively managed and seek to track a specific benchmark index as closely as possible. In contrast, active ETFs are actively managed by a portfolio manager or a team of managers who aren’t beholden to the constraints of an index. While passive ETFs aim to replicate the performance of a specific index, active ETFs involve the manager making decisions about the fund's investments with the goal of outperforming a benchmark index.

Tema’s 3-step investment process is anchored in thoughtful top-down and bottom-up risk-management:

 - Systematic universe construction, risk exclusion and idea generation

 - Fundamental security selection

 - Systematic portfolio construction tied to conviction

Learn more about our approach to investing, here.