Tech investing poses one of the more important, and more fascinating, questions before investors entering 2025. Tech firms contributed outsized returns for the whole market, but do they pose concentration risks? Should, for example, earnings reports in the new year see disappointing results from AI initiatives, it could see confidence drain from key tech leaders. Tech will remain a critical part of portfolios. But getting more specific with tech could help balance a cloud, AI-heavy allocation. A biotech ETF with a specific focus, like the neuroscience ETF MNTL, offers an example.
The Tema Neuroscience and Mental Health ETF (MNTL ), launched earlier this year. The biotech ETF takes an active approach, charging 75 basis points to invest in firms focusing on the central nervous system and mental health. It invests across the world, targeting 15 to 100 pure-play stocks in the space. Specifically, it includes pharmaceuticals, emerging biotech, medical devices, and healthcare services firms. Applying both fundamental sector research and quantitative tools, it looks to combine bottom-up and top-down approaches.
Per ETF Database analysis, the firm focuses largely on North America, with some minor allocations to Japan and Germany. Performancewise, the strategy has outperformed its FactSet Segment average over the last month, according to ETF Database. That said, it has not yet produced the exciting returns investors might want.
Of course, investors are always looking to the future, and the future may be bright for a biotech ETF like MNTL. A U.S. focus could expose the ETF to positive trends like rate cuts that benefit future M&A. What’s more, neuroscience provides some degree of indirect exposure to AI, which, if it continues to advance rapidly, could help improve cutting-edge understandings of the brain. Taken together, an ETF like MNTL can offer a compelling, active way to get into the overall tech space.
For more information, please visit VettaFi.com | ETF Trends.
