Tema Durable Quality ETF (TOLL) Adds Kalshi, Becoming First ETF to Offer Exposure

§ 01 Executive Snapshot

• What: Tema Durable Quality ETF (TOLL) has acquired exposure to Kalshi, the first U.S. federally regulated event contract exchange.
• Who: Tema ETFs, Kalshi.
• Why it matters: This acquisition enhances TOLL's portfolio and signifies a growing institutional adoption of event contracts, especially with major events like the FIFA World Cup and U.S. midterm elections approaching.

§ 02 Key Developments

• Kalshi represents 8.18% of TOLL's net assets as of the date of the announcement.
• Kalshi announced a funding round of more than $1 billion, valuing the company at $22 billion.
• Annualized trading volume on Kalshi has grown from $52 billion to $178 billion over the past six months, more than tripling.
• Kalshi currently commands more than 90% of U.S. prediction market activity.
• TOLL's previous ETF, the Space Innovators ETF (NASA), raised $1.25 billion in its first 37 trading days.

§ 03 Strategic Context

• The addition of Kalshi aligns with TOLL's investment philosophy of investing in companies with durable competitive advantages and regulatory backing.
• The rise of prediction markets represents a new and rapidly growing category in the financial landscape, enhancing the diversification of TOLL's portfolio.

§ 04 Strategic Implications

• Immediate implications include TOLL gaining a unique position in the ETF market by being the first to incorporate event contracts, potentially attracting more institutional investors.
• Long-term, this could signal a shift in investment strategies as more funds consider exposure to innovative financial products like event contracts.

§ 05 Risks & Constraints

• Potential risks include regulatory changes affecting the operation of event contracts and market volatility surrounding major events like elections and sports.
• Competition from other financial products and platforms, as well as dependency on Kalshi's performance and market share, poses additional risks.

§ 06 Watchlist / Forward Signals

• Upcoming milestones include the FIFA World Cup and U.S. midterm elections, which could significantly impact Kalshi's trading volume and TOLL's performance.
• Future developments in regulatory frameworks for prediction markets will indicate the sustainability of Kalshi's growth and TOLL's investment strategy.