The American Reshoring ETF (RSHO), a standout among Tema’s thematic funds, is more than a trend-focused product; it’s a strategic commitment to U.S. economic revitalization. With a focus on midcap growth and quality, RSHO aims to capitalize on the expanding reshoring trend across sectors such as manufacturing, logistics, and healthcare. Guided by Tema’s Yuri Khodjamirian, the fund provides investors with exposure to companies positioned to benefit from reshoring, balancing economic promise with a selective approach to quality.
In today’s world of thematic exchange-traded funds (ETFs), few firms are truly reshaping the landscape like Tema Global with its American Reshoring ETF (ticker: RSHO). Designed with a focus on U.S. manufacturing and midcap growth, RSHO aims to capture the economic advantages of reshoring—the trend of bringing production back to the U.S.
Tema CIO Yuri Khodjamirian spoke with The Wealth Advisor’s Scott Martin to delve into the ETF’s unique approach. Khodjamirian explains RSHO’s goal of providing investors with exposure to companies benefiting from reshoring across sectors such as manufacturing, logistics, and healthcare, creating what he calls an “industrial renaissance” in the U.S. With an emphasis on quality and midcap growth, RSHO is tailored to advisors seeking stable, long-term investments tied to a powerful economic shift.
A Commitment to Durability over Hype
Unlike other firms that jump on short-lived, “headline-driven” trends, Tema is dedicated to long-term themes that “really change companies’ valuations.” Launched as part of Tema’s portfolio, RSHO reflects the firm’s dedication to active management and resilient themes. Tema constructs ETFs around what Khodjamirian calls “structurally attractive, durable parts of the market.”
Tema’s approach involves rigorous research to avoid “hot areas of the market” that might fade with time. Instead, each fund is driven by fundamental analysis, seeking trends that will be relevant for decades. The reshoring trend, driven by supply chain disruptions and geopolitical shifts, is a prime example. Khodjamirian notes, “All of our funds are thought of as investment first. Is this a durable trend? Is this an area or corner of the market that’s overlooked and not overhyped?”
Actively Managed with a Quality Overlay
RSHO stands out in the crowded ETF market for its rigorous selection process, ensuring long-term value for investors. Khodjamirian emphasizes that while reshoring has gained attention across the financial landscape, Tema’s differentiated focus on quality sets RSHO apart, noting that the firm’s approach to thematics prioritizes quality as a key risk management component. The quality overlay allows Tema to “pick high-quality companies that are exposed to [the reshoring] trend but aren’t pumping their stock price because of it.”
Tema’s active management and strict selection criteria are intended to capture durable growth while limiting exposure to companies driven purely by hype. “If you’ve done a good job identifying a trend, that should take care of itself in terms of the growth profile,” Khodjamirian says, “and often what we see is investors fumble that trend by investing in companies that are very, very low quality.”
The Three-Tiered Approach of RSHO’s Portfolio
RSHO’s unique structure divides holdings into three categories: direct reshoring beneficiaries, facilitators, and companies positioned to gain from reshoring’s ripple effects. This multitier approach allows RSHO to capture a broad yet focused segment of U.S. economic growth. The first group comprises manufacturers bringing production stateside. The second, or “reshoring facilitators,” include companies supporting infrastructure needs in construction and logistics. Finally, the “beneficiaries” include sectors that gain stability from a local supply chain, such as healthcare.
Khodjamirian emphasizes that Tema’s approach involves “building a proprietary universe” of these companies, which allows its managers to “apply a good old-fashioned fundamental equity process.”
An Eye for Quality and Midcap Opportunities
RSHO is a midcap-focused fund, a deliberate choice by Tema that seeks to fill gaps in many investors’ portfolios. Midcap companies, often overlooked in favor of large caps, offer robust growth potential and strong balance sheet resilience.
Khodjamirian argues that RSHO “replaces more generic midcap allocations” and appeals to advisors looking to “diversify growth sources.” He explains that while industrials dominate the fund, the reach of reshoring goes beyond this industry, encompassing sectors like healthcare, where reshoring addresses critical needs in biopharmaceutical supply chains.
By focusing on these midcaps, RSHO presents an alternative to large-cap funds while capturing companies that are both established and poised to benefit significantly from reshoring, fitting well into RSHO’s long-term strategy.
Quality Focus: Clean Harbors and Beyond
Tema’s quality overlay ensures that RSHO’s portfolio comprises high-quality companies integral to the reshoring process. Khodjamirian highlights Clean Harbors as an example of the type of companies RSHO seeks. “Clean Harbors is the market leader in hazardous waste disposal in the U.S.,” he says, explaining that the firm will see increased demand as domestic manufacturing grows. RSHO’s portfolio includes other midcap companies that, while lesser-known, play pivotal roles in the reshoring ecosystem.
The quality criterion safeguards RSHO from speculative companies, keeping it rooted in firms with solid fundamentals.
A Core Investment for a New Era of Thematics
RSHO exemplifies Tema’s commitment to durable, multi-sector themes that resonate with advisors looking to build a core strategy rather than a satellite allocation. As Khodjamirian aptly puts it, Tema is about “overlooked parts of the market” with staying power. For advisors considering reshoring as a long-term strategy, RSHO offers a comprehensive and actively managed solution that extends beyond mere trend-following.
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Additional Resources
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Disclosures
Before investing carefully consider the Fund’s investment objective, risks, charges, and expenses contained in the prospectus available at www.temaetfs.com. Read carefully before investing.
Risk Information
Investing involves risk including possible loss of principal. There is no guarantee the adviser’s investment strategy will be successful.
Sector Focus Risk: The Fund may invest a significant portion of its assets in one or more sectors, including Industrials, Materials and Utilities, and thus will be more susceptible to the risks affecting those sectors than funds that have more diversified holdings across several sectors. The success of the Fund’s investment strategy depends in part on the ability of the companies in which it invests to reshore or onshore services to the United States.
Companies may face significant legal, financial and political headwinds in the reshoring or onshoring of jobs into the United States, and these factors may be detrimental to performance. Industrial and Utilities sector companies will likewise be subject to the risks of Government regulation, world events, exchange rates and economic conditions, technological developments and liabilities for environmental damage and general civil liabilities. In addition, many materials companies are significantly affected by the level and volatility of commodity prices, exchange rates, import controls, worldwide competition, environmental policies and consumer demand. Investing in foreign and emerging markets involves risks relating to political, economic, or regulatory conditions not associated with investments in U.S. securities and instruments in addition the fund Is exposed to currency risk.
Tema Global Limited serves as the investment adviser to Tema American Reshoring ETF (the “Fund”), and NEOS Investments, LLC serves as a sub adviser to the Fund. The Fund is distributed by Foreside Services LLC, which is not affiliated with Tema Global Limited nor NEOS Investments, LLC. Check the background of Foreside on FINRA’s BrokerCheck.
Distributor: Foreside Fund Service LLC
For inquiries: info@temaetfs.com
