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Profit from New ETF TOLL: A Monopoly Play

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Investing in companies with sustainable competitive advantages, known as moats, has become a priority for many equity investors. However, identifying firms that can maintain these advantages in the long term is not always easy. One approach is to focus on monopolistic companies with strong and expanding moats. In this regard, Tema ETFs recently launched a new ETF called Monopolies and Oligopolies ETF (TOLL - Free Report) .

Inside TOLL

The actively-managed Tema Monopolies and Oligopolies ETF aims for long-term growth by investing in companies with monopolistic structures, sustainable advantages, and high barriers to entry. This strategy can generate strong returns on invested capital.

The fund charges net expense ratio of 0.75% annually.  The fund is heavy on United States (55.53%), followed by France (15.02%). Industrials (41.02%), Financials (23.61%) and Healthcare (13.31%) are the top three industries in the fund. Airbus Group (5.13%), S&P Global (5.05%) And Canadian Pacific Kansas City (5.02%) hold the top three spots in the fund.

How Does the Fund Fit in the Portfolio?

Monopolies (single firm) and oligopolies (a few firms) play a crucial role in providing mission-critical products and services that bring value to consumers. These companies thrive due to five key barriers to entry: economies of scale, network effects, non-replicable physical assets, regulation, and high switching costs, per the issuer. These factors enable them to possess pricing power, long-duration contracts, and recurring revenues.

Monopolies have the potential to generate high returns on invested capital (ROIC) over extended periods. They tend to perform well even during economic downturns and inflationary periods, particularly if they are undervalued. Their dominance in the market makes them resilient and capable of maintaining profitability in challenging times.

In a nutshell, by investing in companies with robust moats, you position yourself to benefit from their ability to generate consistent profits and withstand competitive pressures.


Monopolies and oligopolies emerge due to barriers to entry that restrict competition, allowing dominant companies to provide valuable products and services to consumers. This provides them with a moat-like benefits.

In the ETF world, we have VanEck Morningstar Wide Moat ETF (MOAT - Free Report) to offer the newbie some competition in amassing considerable assets. The U.S.-focused MOAT is passively-managed and charges 46 bps in fees. There is another fund called VanEck Morningstar International Moat ETF (MOTI - Free Report) . It charges 58 bps in fees.

Investors should note that the new fund TOLL charges higher than MOAT and MOTI. But then, TOLL’s actively-managed nature probably has led to the higher fees of the fund. And actively-managed nature helps the fund manager to stay tuned with the economic and corporate events and accordingly reshuffle the holdings right after the events.

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