Renowned investor Chris Hohn’s TCI Fund represents a modern expression of quality investing, focusing on monopoly-like platforms with high barriers to entry.
These "tollkeeper" businesses share distinctive characteristics, including high barriers to entry and structural pricing power.
Two purpose-built ETFs now apply this philosophy directly.
Chris Hohn, founder of The Children's Investment Fund (TCI), has built one of the most successful track records in investing by focusing relentlessly on business quality. Since 2003, TCI has concentrated on monopoly-like global platforms with high barriers to entry and strong pricing power.1,2
These businesses function as what we call “tollkeepers”—companies that control essential gateways to the modern economy, such as exchanges, payment networks, ratings agencies, and critical physical infrastructure. Their entrenched positions support durable earnings streams that can withstand both economic and technological disruption.
Tollkeeper businesses share powerful characteristics: High barriers to entry, structural pricing power, predictable cash flows, and long growth runways.
TCI's average holding period of roughly eight years reflects Hohn's core belief: "Good companies stay good and bad companies stay bad."3 This long-term discipline allows durable competitive advantages to fully compound.
For investors looking to implement this approach, Tema offers two complementary ETFs inspired by Hohn's quality-focused investment philosophy:
Tema Durable Quality ETF (TOLL) invests in US durable-quality companies with recurring revenues, dominant market share, and high returns on invested capital.
Tema International Durable Quality ETF (ITOL) applies the same disciplined framework outside the US, where many world-class tollkeepers currently trade at meaningful valuation discounts.
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