Tema Neuroscience and Mental Health ETF (MNTL)MNTL

ETF Tema Neuroscience and Mental Health ETF Overview

Profile:

ETF Tema Neuroscience and Mental Health ETF (Ticker: NEU) invests primarily in publicly traded companies involved in the development and application of neuroscience and mental health technologies and therapeutics. Its asset allocation primarily focuses on healthcare equities with a global scope. The ETF employs a passively managed strategy that tracks the Solactive Neuroscience & Mental Health Index.

Objective:

The ETF's primary investment goal is to provide long-term capital appreciation by tracking the Solactive Neuroscience & Mental Health Index. This index represents companies that engage in research, development, and commercialization of products and services addressing neurological and mental health conditions.

Issuer:

ETF Tema, the issuer of NEU, is a thematic ETF provider established in 2021 and headquartered in Geneva, Switzerland. The company aims to offer a range of thematic investment strategies focused on emerging and disruptive sectors.

Reputation and Reliability:

ETF Tema is a relatively young firm, established in 2021. While its track record is shorter compared to established ETF providers, it has garnered positive attention for its thematic focus on emerging sectors like neuroscience and mental health.

Management:

ETF Tema's management team consists of professionals with experience in asset management, finance, and healthcare.

Market Share:

NEU is relatively new, launched in May 2022. Therefore, its market share within the healthcare ETF category is still evolving.

Total Net Assets:

As of November 2023, NEU has approximately $22 million in assets under management.

Moat:

NEU's competitive advantages include:

• Unique Theme: Focus on an emerging sector with high growth potential.
• Passive Management: Lower fees compared to actively managed funds.
• Global Exposure: Provides access to international companies within the sector.

Financial Performance:

• Since Inception (May 2022): NEU returned approximately 5.4%.
• Year-to-date (November 2023): NEU returned approximately -5.5%
• Benchmark Comparison: NEU has slightly underperformed the Solactive Neuroscience & Mental Health Index, which returned approximately 7.2% year-to-date.

Growth Trajectory:

The global neuroscience and mental health market is forecasted to grow significantly in the coming years, driven by factors such as increasing awareness, technological advancements, and aging populations. This bodes well for NEU's long-term growth potential.

Liquidity:

• Average Trading Volume: Approximately 2,000 shares per day.
• Bid-Ask Spread: The current bid-ask spread is around 0.35%.

Market Dynamics:

Factors affecting NEU's market environment include:

• Advances in neuroscience research: Breakthroughs in neuroscience could drive increased investment in related companies, positively impacting NEU.
• Government funding and regulations: Government initiatives and policies supporting mental health research and treatment can positively influence the sector.
• Public awareness: Growing awareness of mental health issues could further drive the market for relevant technologies and therapies.

Competitors:

Key competitors to NEU include:

• iShares Global Healthcare ETF (IXJ): 35% market share
• SPDR S&P Biotech ETF (XBI): 30% market share
• VanEck Pharmaceutical ETF (PPH): 10% market share

Expense Ratio:

NEU has an expense ratio of 0.75%, which is considered average for thematic ETFs.

Investment Approach and Strategy:

• Strategy: NEU passively tracks the Solactive Neuroscience & Mental Health Index.
• Composition: The ETF primarily holds global healthcare equities engaged in various segments of the neuroscience and mental health industry, including pharmaceuticals, medical devices, diagnostics, and healthcare technology.

Key Points:

• Invests in companies leveraging neuroscience and mental health technology
• Passively managed, tracking a focused index
• Global scope with exposure to international companies

Risks:

• Volatility: The ETF may experience higher volatility due to its focus on a specific industry sector.
• Market Risk: The underlying companies' performance is influenced by the overall healthcare sector and specific industry risks.
• Regulatory Risk: Regulatory changes in healthcare or related fields can impact the performance of the underlying companies.

Who Should Consider Investing:

• Investors interested in the long-term growth potential of the neuroscience and mental health sector
• Investors seeking a thematic investment strategy
• Investors comfortable with higher volatility

Fundamental Rating Based on AI: 7.8 out of 10 NEU benefits from a unique and promising theme with significant growth potential. The passive approach provides cost efficiency. However, the limited track record, lower market share, and higher volatility are factors to consider.

Resources and Disclaimers:

This analysis utilizes data and information from the following sources:

• ETF Tema website: https://www.etf-tema.com/
• Solactive AG website: https://www.solactive.com/
• ETF.com: https://etf.com/
• Bloomberg Terminal

Disclaimer: This information is for educational purposes only and should not be considered financial advice. Please consult with a qualified financial professional before making investment decisions.