National Bank is expanding its ETF lineup today, launching the NBI Thematic Rotation ETF (NTHM) on the Toronto Stock Exchange.
The ETF tracks the Thematic Rotation Quality Momentum Screened Index (TRQMS), a proprietary benchmark designed to identify and rotate into leading global investment themes. Rather than providing static exposure to a single theme, the strategy rotates among themes demonstrating the strongest combination of quality and momentum characteristics.
Key Takeaways
- National Bank’s new NBI Thematic Rotation ETF (NTHM) begins trading on the TSX today.
- The ETF tracks a proprietary index that rotates among the seven highest-ranked themes from a universe of 45 thematic categories.
- At launch, NTHM’s underlying index includes E-Sports & Interactive Gaming; Battery Minerals & Raw Materials; and Battery Technology & Raw Materials as its top three themes. .
A Different Approach to Thematic Investing
Thematic investing has traditionally required investors to choose which long-term trend they believe will outperform, whether its artificial intelligence, cybersecurity, clean energy, or robotics. NTHM takes a different route.
The underlying index evaluates 45 thematic subcategories drawn from 35 VettaFi indexes and selects the seven highest-ranked themes at each quarterly rebalance. Rankings are determined using a proprietary quality momentum framework designed to identify themes exhibiting both strong fundamentals and positive market leadership.
Because the strategy draws from an existing universe of thematic indexes, new themes can be added as they emerge without requiring the creation of additional standalone ETFs.
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Top Themes in TRQMS
Following the latest rebalance, the index holds 173 securities across seven thematic categories. Weightings are relatively balanced, with each theme representing approximately 13%-15% of assets.
Current allocations include:
- E-Sports & Interactive Gaming (15.0%)
- Battery Minerals & Raw Materials (14.8%)
- Battery Technology & Storage (14.8%)
- Semiconductors (14.7%)
- Robotic Technologies & Computation (14.6%)
- Natural Resources (13.4%)
- Software-as-a-Service (12.7%)
Technology Leads, Supported by Real-World Infrastructure
Technology accounts for roughly 40% of the index. The largest thematic allocation, E-Sports & Interactive Gaming, is led by holdings such as Microsoft (3.30%), Meta Platforms (2.20%), and Tencent Holdings (2.12%).
At the same time, materials represent nearly 25% of the portfolio, while industrials and energy account for another 23% combined. The allocations reflect the growing importance of the companies supplying the materials, equipment, and energy required to support AI development, electrification, and advanced manufacturing.
Battery Minerals & Raw Materials, for example, includes companies such as BHP Group and Freeport-McMoRan, while the Battery Technology & Storage segment is anchored by holdings including Bloom Energy and Albemarle.
Semiconductors Remain a Core Allocation
KLA Corp. is currently the largest individual holding in the index, alongside Applied Materials and Lam Research.
Elsewhere, the portfolio provides exposure to industrial automation through robotics companies, traditional energy and commodity producers through the natural resources allocation, and enterprise software providers through its Software-as-a-Service sleeve.
That mix gives investors exposure not only to the companies developing next-generation technologies, but also to the businesses supplying the materials, equipment, and energy needed to power them. Notable holdings include AppLovin, Oracle, and Palantir Technologies.
National Bank Continues ETF Expansion
NTHM joins a growing roster of ETFs from National Bank Investments as Canadian issuers continue to expand their thematic offerings.
National Bank Investments oversees more than $115 billion in assets across its investment platform.
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