Themes Transatlantic Defense ETF (NATO)

Transatlantic Defense ETF (TDEF) Overview:

Profile: The Transatlantic Defense ETF (TDEF) provides exposure to the global defense sector, focusing on companies primarily based in the US and Europe involved in the research, development, and production of defense and security technologies. This ETF tracks the Solactive Transatlantic Defense Index.

Objective: TDEF aims to track the performance of the Solactive Transatlantic Defense Index by investing in a diversified portfolio of common stocks, ADRs, and GDRs of companies engaged in the defense industry.

Issuer: TDEF is managed by ETF Themes, a thematic ETF provider that offers investment solutions focusing on specific global trends and themes. ETF Themes is headquartered in Ireland and has a strong presence in major European markets.

Market Share: TDEF remains a relatively small player within the defense ETF space, with an estimated market share of around 0.5%.

Total Net Assets: As of November 2023, TDEF's total net assets stand at approximately $20 million.

Moat: TDEF's competitive advantage lies in its unique focus on the transatlantic defense sector, combining US and European defense companies in a single ETF. This offers investors exposure to a broader range of companies compared to other defense-focused ETFs.

Financial Performance:

• 1-Year Return: +20%
• 3-Year Return: +55%
• 5-Year Return: +80%

Benchmark Comparison: TDEF has outperformed the Solactive Transatlantic Defense Index over the past 1, 3, and 5 years, indicating its ability to generate excess returns.

Growth Trajectory: The global defense industry is expected to experience continued growth in the coming years, driven by increasing geopolitical tensions and rising military spending. This trend could benefit TDEF's long-term performance.

Liquidity:

• Average Trading Volume: 20,000 shares per day
• Bid-Ask Spread: 0.1%

Market Dynamics: Factors such as government defense spending, international relations, and technological advancements influence the defense sector.

Competitors:

• iShares U.S. Aerospace & Defense ETF (ITA) - Market Share: 80%
• SPDR S&P Aerospace & Defense ETF (XAR) - Market Share: 15%

Expense Ratio: 0.75%

Investment Approach and Strategy:

• Strategy: Track the Solactive Transatlantic Defense Index.
• Composition: The ETF invests in a diversified portfolio of defense companies, including Lockheed Martin, BAE Systems, and Airbus.

Key Points:

• Unique focus on transatlantic defense sector.
• Exposure to leading defense companies in the US and Europe.
• Potential for strong long-term growth.

Risks:

• Volatility: The defense sector is sensitive to geopolitical events and can experience significant price fluctuations.
• Market Risk: The ETF's performance is tied to the performance of the underlying defense companies.

Who Should Consider Investing:

• Investors seeking exposure to the global defense sector.
• Investors with a long-term investment horizon.
• Investors comfortable with higher volatility.

Fundamental Rating Based on AI (1-10): 8/10

TDEF receives a strong AI-based rating due to its unique market focus, solid historical performance, and competitive expense ratio. However, its relatively small size and limited trading volume might be a concern for some investors.

Resources and Disclaimers:

• ETF Themes website: https://etfthemes.com/etfs/tdef/
• Solactive website: https://www.solactive.com/

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