Royalties 101, with Chris Semenuk, Portfolio Manager, Tema Global Royalties ETF

Episode Summary

In the latest episode of Signals, Nick Mazing sits down with Chris Semenuk, Portfolio Manager at Tema Global Royalties ETF (ROYA). Together, they unravel the multifaceted world of royalties. While many associate royalties primarily with music, they extend far beyond, touching areas like pharmaceuticals and natural resources such as oil and gold.

Chris delves into the unique appeal of royalty companies. Shareholders not only gain access to distinct assets, be it a high-potential oil property or a promising oncology drug, but also benefit from the expertise of seasoned management teams. These companies offer a blend of unique asset exposure and experienced leadership.

Rounding off the discussion, Chris introduces the Tema Global Royalties ETF. This fund aims to provide investors with diversified exposure to the best royalties across various sectors. It's a deep dive into the potential and intricacies of an often-overlooked asset class.

Guest-at-a-Glance

💡 Name: Chris Semenuk 

💡What they do: Portfolio Manager

💡Company: Tema Global Royalties ETF

💡Noteworthy: Worked as a global fund manager for 20 years at a large US pension fund, specializing in active stock picking.

💡 Where to find them: LinkedIn

Key Insights

The Broad Spectrum of Royalties

Royalties aren't just about music. In the episode, Chris Semenuk and Nick Mazing explore the landscape of royalties, highlighting that they encompass a wide range of intellectual properties. From the familiar music royalties that artists like Taylor Swift earn from streaming platforms to more complex areas like pharmaceuticals and natural resources such as oil and gold. These royalties can be paid to individuals, companies, or even governments. The discussion underscores the multifaceted nature of royalties and their significance in various industries.

Unique Appeal of Royalty Companies

Chris Semenuk delves deep into what makes royalty companies stand out. Shareholders in these companies gain a unique exposure to assets, whether it's a promising drug in the oncology sector or a high-potential oil property in the Permian Basin. Beyond the assets, there's the added advantage of experienced management. Many executives in royalty companies come from industries related to the assets they oversee, bringing a wealth of expertise. This combination of unique assets and seasoned leadership makes royalty companies an attractive proposition for investors.

Tema Global Royalties ETF: Diversified Royalty Exposure

Chris introduces the Tema Global Royalties ETF, aiming to offer investors a diversified exposure to top-tier royalties across various sectors. The fund's objective is to give shareholders access to the best royalties available, spanning different asset categories. Currently, 70% of the fund is invested in commodities like precious metals, base metals, and oil and gas. However, the ETF also ventures into non-commodity sectors, such as the pharmaceutical industry. This diversified approach ensures that investors get a broad spectrum of the royalty landscape, maximizing potential returns while spreading risk.