Thematic investing strategies have gained traction as advisors have come to recognize the impacts of nascent and structural market trends on potential portfolio performance. In the exchange-traded fund (ETF) landscape, thematic funds are often considered satellite allocations, but one firm has set its sights on changing that perception.
Tema Global is committed to a distinctively durable and institutional-grade approach, focusing on longevity, robustness, and investment-first fund construction. Yuri Khodjamirian, Tema’s CIO, recently met with Wealth Advisor Managing Editor Scott Martin to discuss the American Reshoring ETF (ticker: RSHO), a core Tema strategy that exemplifies his firm’s dedication to delivering lasting value.
Established 18 months ago, backed by venture capital and high-profile industry veterans, Tema hit the ground running with a mission to be the first independent, institutional-grade active ETF manager. The firm’s goal is to introduce strategies that are not only innovative but also built on solid, forward-looking market trends.
Tema has focused on creating ETFs that target what Khodjamirian describes as “structurally attractive, durable parts of the market.” Active management and robust risk management can make a significant difference in these select areas, offering long-term value rather than short-term gains driven by market hype.
One of the key differentiators for Tema is its deliberate avoidance of headline-driven, momentum-based investing. While many thematic ETFs have launched to capitalize on the latest trends, Tema’s strategies are rooted in a deep understanding of long-term market dynamics.
Khodjamirian emphasizes that Tema’s funds are designed with an investment-first mindset, focusing on multi-decade themes that the broader market often overlooks and underappreciates.
This rationale is particularly evident in the American Reshoring ETF. The reshoring theme, driven by a paradigm shift in how companies view their supply chains and manufacturing locations, is a long-term play on the revival of the US industrial base, a structural change that is reshaping the US economy.
The RSHO ETF is a cornerstone of Tema’s product suite. Managed by Chris Semenuk, a seasoned investment professional with more than 30 years’ experience, the strategic equity fund targets companies benefiting from a reshoring renaissance in the US. Manufacturing is returning to US shores as companies seek to mitigate the risks associated with global supply chains, trade wars, and deglobalization.
Tema’s consideration of the reshoring dynamic is comprehensive, focusing on three key categories of companies:
- Manufacturers Returning to the US: These companies are relocating their production facilities back to the US to gain advantages such as proximity to customers, improved supply chain reliability, and cost efficiencies.
- Reshoring Facilitators: These are companies that play a critical role in enabling the reshoring shift, such as those involved in building new manufacturing plants or providing essential infrastructure.
- Reshoring Beneficiaries: These companies may not be directly involved in reshoring activities but stand to benefit from increased industrial activity in the US, leading to improved revenue growth and profitability.
The reshoring trend is not merely a reaction to current market conditions; it represents a long-term structural change. As companies increasingly prioritize stability and control over their supply chains, the shift back to domestic manufacturing is likely to continue for many years, providing a steady growth opportunity for investors.
Building a portfolio around such durable themes requires a disciplined and thorough methodology. Tema employs a proprietary process to identify companies that are best positioned to benefit from the reshoring trend.
The firm conducts rigorous bottom-up analyses, including direct engagement with company management teams, state-by-state revenue mapping, and a focus on high-quality companies with strong business models and sound financials.
Khodjamirian highlights that this process is not easy and requires a level of due diligence and expertise that sets Tema apart from many other thematic ETF providers. The firm’s emphasis on quality and risk management ensures that its portfolios are not only well-positioned to capitalize on long-term trends but are also resilient in the face of market volatility.
One of the unique aspects of Tema’s reshoring ETF is its focus on mid-cap companies, which can offer a compelling blend of growth potential and stability. Khodjamirian points out that these companies are typically underfollowed and underappreciated, yet they have historically delivered strong returns over the long term, especially when combined with a focus on quality.
By incorporating mid-cap companies into its thematic ETFs, Tema aims to offer a way to enhance diversification by providing exposure to this segment of the market, aligning with Tema’s broader strategy of uncovering overlooked opportunities that have the potential to deliver superior returns.
These construction choices— targeting durable themes with strong multi-sector implications, such as reshoring—can make RSHO and other Tema ETFs suitable as core allocations within investor portfolios, Khodjamirian believes. His firm engages with advisors and investors to understand their needs and challenges and explain how certain themes represent fundamental shifts in the market that can provide core-like stability and growth.
As Tema continues to grow, its focus remains on uncovering unexplored parts of the market and bringing institutional-grade strategies to the ETF space. The firm’s commitment to quality, active management, and risk management sets it apart in a crowded market, positioning it for long-term success.
Looking three to five years ahead, Khodjamirian envisions Tema expanding its product offerings, particularly in areas such as healthcare, strategic equity, and alternatives. The firm is exploring ways to bring more liquid forms of alternative investments to the market, providing investors with exposure to these strategies without the complexities and limitations of traditional private market investments.
For advisors, Tema’s approach offers a fresh perspective on thematic investing. By focusing on durability, quality, and long-term value, Tema is not just following trends—it’s setting a new standard for what thematic ETFs can achieve.
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Additional Resources
- Contact Tema Global
- American Reshoring ETF (RSHO) Overview
- American Reshoring ETF (RSHO) Factsheet
- American Reshoring ETF (RSHO) Investment Case
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Disclosure
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
