Paisley Nardini, Tema ETFs

So let's talk about the firm really quickly. it was only founded in 2022. It's got a couple of backers, and the platform has doubled in 2026 at $4 billion in assets. So just curious from a personal level, what drew you to Tema at this point in the firm's story? Yeah, just that growth you mentioned. So I got a little bite of the startup bug after spending over a decade at like kind of the large corporate investment management firm and really liked my ability to move the needle. You kind of participate fully in the upside and the downside, but being able to have autonomy and really help drive outcomes and growth of the firm, joining Tema, I think was super exciting. We're at this kind of intersection of where allocators are putting money to work and these growth-oriented

Thematic parts of the market and doing so in a way that we're nimble because we're so small. So as you mentioned, we launched in 2022. We've grown meaningfully. I think 2026 year-to-date as of the third quarter now, I think Tema was the second fastest-growing firm year-to-date in the active ETF space. Two of our strategies, NASA, which is space exploration, of course, and then Volt, which is our electrification ETF, were two of those drivers. And so again, it's just really exciting to be at the forefront of client conversations and being able to kind of guide that narrative. Well, I had Yuri on not too long ago when we talked...

Or not Yuri. Oh, geez. Now we're live and I forget his name. Was it Moritz? Yes. And we talked about the NASA ETF. Cool. Gosh, I do like three of these a week and I end up forgetting people's names. Yeah. But anyways, it's super interesting and I love the thesis. I love the story. But today we're here to talk about DICE, which is a very new type of ETF. It's the Trading and Prediction Markets ETF. Launched September 9th on CBOE. It's actively managed, as you said. So at a high level, what is this fund? What's it investing in and what's it doing? Yeah. I want to start actually by saying what it's not, which will be very quick. But I think when people hear prediction market ETF, I think their first thought is like,

Oh, it's an event contract ETF. So a lot of strategies are ETFs that have filed. They have not yet launched because there's some pushback. But a lot of strategies have filed to launch strategies in which they're actually trading event contracts. Those are binary outcomes, right? If you're right, the ETF goes up. If you're wrong, the ETF can go to zero. What we sought to launch really ties back to our DNA at Temo, which is an investment-led firm. So with all of the noise in the active ETF space right now, I think a lot of advisors are feeling fatigue, feeling like a lot of this is being launched just for marketing purposes. When we launched DICE, which again is kind of a clever ticker, I would say, given the

Prediction market topic, we launched it with the intent of thinking about this is a massively growing part of not only the US economy, but the global economy. How do we determine that it is? We look at trading volumes. I think some of the more recent stats have shown just lately about $50 billion in kind of monthly trading volume taking place. That's up double from where we started this year. What's driving that, right? We had 2024, we had some of the election rhetoric kick off some of the trading activity on, say, Polymarket and Calci. And then we had the World Cup earlier this summer. That drove a lot of activity.

Now, and the launch of DICE in September of 2026 was not coincidental. It's the beginning of the NFL season. That's where we know there is a lot of activity on these trading platforms. And then what's next around the corner as we enter the fourth quarter? The midterms. And so I think really looking at how we view the trading and prediction ETF DICE that we launched was how do we invest in the infrastructure, the actual platforms that are driving this? So again, started with what is DICE not? It is not trading event contracts. It's trading the ecosystem, the infrastructure, the pipes that are driving all of this. And so we can talk about some of these specific plays, but really thinking about this as a growing

Part of the market that anyone from sophisticated professionals down to individual consumers, is paying attention to. You can't look away from it. Every time you turn on your TV, when you're looking at ads, we're talking about ways to place bets on different platforms. And so we know that the consumer is putting capital to work. So how can we take advantage of this from a long-term strategic, durable investment perspective? And that's, again, comes back to we're the only prediction market ETF on the market today. And then we can also talk about some other unique aspects of the fund. Yeah, I definitely want to talk about what's in it. But I want to stay on the growth of this market because the trading volume is forecasted to

Increase nearly 20x to 1 trillion by 2030. At least that's what I was reading. So what's driving that growth curve? What do you think underlying is actually driving it? I'll give you a real-life example. You and I both have trading backgrounds. I got too busy to trade. The bug hit me. I downloaded interactive brokers to get back in the mix. And when I'm looking at eMini futures, guess what's there? A prediction market. I can take that bet right there next to my chart. So I'm sure that has something to do with it. But kind of walk me through the thesis over at the firm of what do you think is actually driving this volume? That's exactly it. that's one of our holdings in DICE as interactive brokers.

And just for that reason, they're integrating the ability to trade contracts directly. So it's a seamless user experience, I would say. You're not having to go out and download a different platform. It's being presented to you. And this is really the rise of advertising. And I think, as I mentioned prior, everywhere we look, there's ads for different, whether it be sports gambling, online betting. And I think with just the rise or the proliferation of information overload, right? If you're on Twitter, as we were joking, I still call it Twitter. You're just this constant flux of information. I think all of us feel it in our daily lives. And the ability to transact or take advantage of some of that data to make a profit, I think, is becoming increasingly attractive.

And so although we focus a lot on sports, because that was the genesis of much of this, market, as well as crypto, and we can talk about that, because some of these platforms are crypto native. And so the genesis several years ago was like blockchain, crypto world, that it's just now starting to get into more of the online betting space. But as we look at the infrastructure build out, more and more of these, and I don't want to call them blue chip names, but they're not like these dark corners of like the dark web that are engaging in this. It's interactive brokers, as you mentioned. It's Coinbase. It's Robinhood. Intercontinental Exchange, which is the parent company of the NYSE.

So as we think about this institutionalization, I would say, of this space and the recognition that individual consumers, as well as professionals like ourselves, are intrigued. Is there ways for us to start thinking, huh, we have the Fed meeting, which of course has just since passed, there'll be another one in October and December. But is there a way for me to place a bet on that? Or is there a way for me as an institutional hedge fund, perhaps, to place a trade in a portfolio around next month's CPI print? And so what started as, hey, I want to place a bet on the upcoming Dodgers game, based in Southern California, by the way, has now expanded into something that's way more institutional in nature.

And so the reach of that, the volume of the transactions that can take place on some of these platforms is increasing alongside of that. So I think it's the seamless integration. And we mentioned some of those companies just now. I think it's the rise of advertising and media. All of these companies, especially in the sports world, are looking to make a buck. And then ultimately, the World Cup, the Olympics in 2028, which is also going to be in Southern California. there's so many kind of global platforms of opportunities to place a bet on binary outcomes. And then I think more so in the near term, what's really driving the volume is going to be the midterms.

We've seen a huge rise that kicked off, as I mentioned, in 2024 with the election. So with the midterms coming up, there is already a lot of activity on these platforms for people that are kind of placing their views to make money. Well, I could have a whole nother podcast on this. You mentioned the Dodgers, but we did get baseball ETFs this week. We actually got levered baseball ETFs this week, which, we can, again, that is a conversation for another day. It is. Back to Dice. We already talked about Kaushy, Polymarket, but both of these companies are private. So can you walk us through how you're getting this exposure? I'm assuming it's very similar to how you got SpaceX exposure in NASA through that SPV structure.

Yeah, that's exactly right. So again, I almost want to start with what is it not? So just to be very clear, several of Tema's ETFs have pre-IPO exposure. And you mentioned NASA, which was one that took place earlier this year. When we go out to get exposure to some of these pre-IPO companies, this is not a short-term like kind of meme stock, like, hey, let's get in the run-up of the IPO and then sell it. As I mentioned at the onset, Tema is very much an investment forward or investment-led firm. And so as we're making allocation decisions, we're very much looking at valuations.

We're looking at higher quality. So we're thinking about the durability of these companies. These are strategic allocations for us. So through our operations and through some of our expertise and partnerships, we have an upper hand, I believe, to give investors something that is very unique, that they're not getting elsewhere. There's no other daily liquid ETFs, at least that I'm aware of as of today, that provide exposure to CalSheet, to Polymarket. And so DICE's ability to gain access to those pre-IPO, so we're doing these through an SPV, special purpose vehicle, we're cognizant that ETFs, of course, are daily liquid vehicles. There's other strategies in the market that are following, like State Street, for example, has PRIV, P-R-I-V, which is an ETF that has like a 15% sleeve for private credit exposure.

So investors can kind of think about this in the same way. These are daily liquid ETFs. We're not trying to cram a bunch of illiquid exposure within this. So again, what is this not? This is not us just trying to be flashy and exciting and market this as, oh, get pre-IPO exposure. No, we want to hold CalSheet. We want to hold Polymarket, irrespective of if they're pre-IPO or public stocks today. And I think, I'm glad you brought up NASA. That's a prime example. We were able to procure exposure to SpaceX pre-IPO. So I think a lot of people thought, oh, great, once it IPOs, they're going to sell it out of the fund. Absolutely not. It's one of our largest holdings. It continues to be to today.

And the reason that we invested in it when we first launched NASA was to give exposure to one of the most influential parts of the space economy. And if we loved it in March, we still love it today. And so the same thing goes for DICE. And so I think it's important to understand that we are constraining how much of this pre-IPO exposure that we're putting in these funds. And so CalSheet and Polymarket, respectively, are about 7.5% in this SPV vehicle. So combined, they make up about 15%. So the other 85% exposure within DICE is publicly listed companies, fully daily liquid. And so we're very much cognizant of that. And the last thing I'll say is these are active strategies.

They're unique. I think they're really at the forefront. And then in addition to having some of this pre-IPO exposure, which can be quite attractive for many investors, these are priced. We feel very attractively for their categories. DICE is about 75 basis points. So all of that kind of encompasses something unique for investors. But again, being cognizant that these are long-term, durable, and strategic allocations within these portfolios. I definitely want to talk about the other 85% of this here in a second. But I want to stay on the 15% CalSheet Polymarket position, just mechanically for investors to understand. Right now, you acquired that position about 10% to 13% below where their most recent private valuations are.

So you do own them at a premium. So what does that discount actually mean to shareholders? Or is NAV adjusting to that? Can you just walk us through whether or not that discount is baked into NAV? Or help me there. Yeah. Yeah, great question. So we price these. We're not trying to be overly cute or complex with how we're pricing these. So the price at which we acquire these positions pre-IPO is how they are priced on a daily basis within the ETF. So let's just say for simplicity purposes, we buy CalSheet at $75 and Polymarket at $100. Every day, because those are not trading or not daily liquid, we're going to bring forth that valuation or that price on a daily basis until we have an updated valuation, if they go through another funding round, or until that stock individually goes public.

So there's a bit of kind of stale component within these prices, which of course is one of the, I guess, pushbacks on some of the illiquid or private markets. For better or for worse, less volatility in the day-to-day market pricing, but also the most realistic and accurate and appropriate way to price if we don't have updated information. So we're pricing these within the fund at the price in which we're procuring them in the pre-IPO SPV structure. Got it. All right. Well, I actually didn't know how that worked. So you educated me there. So let's talk about the other 85. So you've got, as we talked about, Interactive Brokers, Coinbase, Intercontinental Exchange, Robinhood, Circle.

These are kind of broader financial infrastructure baskets than just prediction markets. So I kind of know what the thread that connects them is, but is part of your active strategy also to make sure you're evaluating these companies fundamentally to make sure that there are good investments? Or is it just, hey, they do prediction markets. It's available for us to put in the fund. Let's just put it in. Yeah, really great question and a really important point that allows me to kind of tout the rigorous investment process, I would say, that we have at TEMA. I've worked at many firms that are completely systematic in nature, and there is absolutely nothing wrong with that. There is beauty in having a systematic process for portfolio construction.

Sometimes you remove the human emotion. The way that TEMA goes about portfolio construction, I call it a systematic sandwich. You'll understand here in a moment. But for the initial screen for many of these, let's think about the universe, whether it's prediction markets, whether it's thematic, AI-driven biotech. We have usually hundreds, thousands of available stocks, especially if we're thinking globally. And DICE in particular is not constrained to just US. It has the ability to move outside our borders. So if you think about that initial market, oftentimes we're doing a systematic screen up front that is driven by industry, driven by sector, driven by some of those components I mentioned earlier, valuation, quality, cash flow, kind of that durability component.

Because again, these are long-term investments for us oftentimes. So after that initial kind of quant screen, as I call it, the systematic, the first layer of the bread on the systematic sandwich, that's really where the team starts to think about kind of bottom-up, more of a fundamental approach. So DICE is obviously focused on a part of the market that's pretty new. some of these companies have been around for a couple years now. Their entrance into more of the prediction markets is fairly green. And so really selecting companies that are tethered to this in some form or fashion. Something that we really focus on a lot at TEMA is the purity of our strategies. And so whether it's our electrification ETF, whether it's NASA, whether it's DICE, we want to ensure that the holdings, because these are more concentrated portfolios, right?

You're not going to open an ETF and see hundreds of different securities. These are all thoughtfully put in here. They're pure plays on the space. And they're really think about the entire kind of vertical or kind of pipeline of what goes into prediction markets. So although we might just see at the front, CalShare Polymarket, the exchanges, kind of the back-end ecosystem that supports all this, as we kind of sometimes call it in the industry, the plumbing, is really important. And so that's why Robinhood, Interactive Brokers, Coinbase, some of the other allocations in the fund are looked through from both a systematic screening process and then a fundamental kind of bottom-up process to ensure that they fit within and we're comfortable holding them.

Because again, these aren't short-term allocations. Right. So hopefully that's helpful. Yeah, super helpful. So how should I think about this? Prediction markets are, as we talked about, there's a crossover with sports betting, with politics, with crypto. Is DICE a fintech play? Is it crypto adjacent? Like, how do you think about it? Yeah, I think it's fair to say it's crypto adjacent because a lot of this technology was born out of the crypto space. So I think to sit here and say, like, there's no impact from crypto I think would be silly. Like, Coinbase, for instance, is one of the holdings. And this is a crypto infrastructure play. Polymarket is crypto native. That was kind of some of their origins.

It runs on blockchain. So as you think about some of these, there is a little bit of kind of a tether to the crypto world. But again, that's why I would say more just a reflection of where this technology was born out of and how it's being utilized today, kind of moving beyond just the blockchain and beyond crypto. So for an advisor kind of thinking about DICE, how should they position it in a client portfolio? I know that's a loaded question, but it definitely deserves more love than, a 5% sleeve in crypto, right? There's definitely a more, in my opinion, there's a more structural reason to own this with the whole advent of this market. So how would, if you're talking to an advisor, like, how would you explain to them how they need to think about this?

What I've seen in practice is several advisors who have a thematic or even maybe like a sector rotation part of their portfolio allocation. There's advisors out there that are just purely passive or maybe they've stepped into factors. This might be a little bit too spicy saucy for them, of course. But for advisors that have a sleeve in their portfolio that is thematic in nature, which ultimately then is a way for a lot of these advisors to have something exciting to talk about their clients to on a quarterly basis. There's more of a narrative there, right? And so from an allocation perspective, DICE especially, I view to be a thematic play.

You're not, we talked a little bit about some of this being crypto adjacent. You're not going to have the volatility that you would in just holding, Bitcoin or crypto directly. So it could be a lower vol way to give clients access to the infrastructure, like mentioning Coinbase is in here, to have a play on that indirectly. I think the way that I see it is if you take a step back and think about as you're investing across equities, which are, the dominant driver of risk in most portfolios, you're taking on risk and you're taking on volatility to be compensated in the form of return. And so as you think the opportunity set of like, where's the economy growing?

I think a lot of people would agree that the U.S. economy tends to be the dominant driver from like a global perspective. Within the U.S. in particular, we've been hyper-focused over the last couple of years on technology and AI, which continues to march full steam ahead. There's so much other technology that's popping up on a daily basis that's driving innovation, that's, really driving GDP, the economy. And so the way that I look at it, DICE is a thematic way to play on this kind of niche part of the market that as of two years ago, no one was really talking about mainstream. And now it seems like everywhere I look, everywhere I go, people have, apps pulled up, people are advertising on television, we're talking about midterms.

And again, even in our world of being more of an institutional investor, we're starting to talk about these platforms for expressing views within portfolios. And so I think this infiltration is, again, and this kind of loops back to where we started, how does an advisor allocate to this? They think about it as they would anything else within a thematic AI-driven kind of technology play. And then you size that appropriately. I don't think it would be a prudent allocation if you're throwing 20, 30% of your portfolio in this. But if you have anywhere from, say, 5 to 10% of a total portfolio in a thematic part of the investment markets, I think DICE can play an instrumental role in that. So, Paisley, you and I, well, I was joking with you in the five minutes I saw you at Future Proof about what your day-to-day looks like now.

I've watched you over the last handful of years, and you've definitely become more of an engagement voice. Just curious, what's your day-to-day look like now compared to what it looked like five years ago? I'm spending most of my time aggregating information, like all of us are, and then finding a way to make it digestible. My job, I see, is it being a translator. I look out at the market, and with all of the noise, but also all of the opportunity, all of us are really feeling overwhelmed. And so my role over the last few years has been, like, how can I help advisors digest that information to make better decisions for their portfolio? I think having an investment background helps give a little bit of credibility to that versus just coming from, like, a marketing background.

But, like, how do we build better portfolios? How do we be prudently participating in the markets? So my day-to-day is really focused on that kind of digesting, articulating, supporting advisors, as well as institutional allocators, and supporting the business. I think a lot of this is also just exciting and fun to talk about. So if we can start conversations, get people to pay attention to some of these pockets that kind of come out of nowhere. we were just talking earlier about some of the new technology. I just downloaded Muse, which is the new meta chatbot a couple days ago. whether this ends up being the end-all, be-all, I'm sure there'll be, 10 other versions of this.

But these are exciting parts of the market, and they're driving the new frontier. With so much noise out there, a lot of us are just going to miss that. So, like, how can I help people see what's going on, what's exciting, and then help allocate capital to these parts of the growing market? Well, I think you're in an exciting place, right? We've got – you guys have launched a NAS ETF. You've now launched DICE. You also have a handful of other ETFs. I guess last question would be, what's, like, the through line for how you guys decide what to build next? I know we're going to see more from you, but what's that look like inside the building? Yeah. So, there's kind of two ways to go about this in this day and age.

There's firms out there – and, again, just want to preface, like, I'm not throwing shade at this. There's multiple ways to be successful and to support clients. You can either do the quantity game or you can do the quality game. And many firms are finding themselves somewhere in between. At Temma, we try to find the intersection of what's our area of expertise. And oftentimes, because we're such a small and lean firm, we're partnering with research experts and outside advisors. We're bringing in in-house expertise. We just brought somebody in who has a really strong commodity background. So, thinking about just the growth of real assets and inflation hedging. So, we try to think about our kind of broader spectrum of capabilities of where do we have expertise?

Where do advisors and investors need solutions? I know there's a lot of kind of multiple versions of the exact same flavor of vanilla ice cream out there. Maybe your vanilla is a little bit better than the next. But I think we try to ask ourselves, like, is this really where we have expertise and we can be differentiated? Because if we can't be differentiated and we're just going to be, one fish in a broader sea, probably not going to be very successful for us as a firm. So, how do we really concentrate our small, nimble firm on where the market's headed, where we can add value from a fundamental kind of, as I said, bottoms-up process in finding security selection? Because if we can't do that, why are we going to come to market?

And then we're also willing to kind of go outside the confines of the play it safe. And I think that's exactly the success that we saw earlier this year from a timing perspective of launching something like NASA. Coming to the market, as we feel, is a very opportune time for prediction markets and trading platforms through DICE. So, we're willing to kind of take some of those bets within reason because of our expertise and because of what we see as kind of a spotlight on certain parts of the market. Well, Paisley, I always enjoy our time together. Before I let you go, where can people learn more about Tema and find everything they need to know about DICE? Yeah, temaetfs.com. We just brought in some awesome marketing resources to join the firm.

So, we're building out kind of our presence on socials, whether it be X, whether it be LinkedIn. So, expect to see a lot more from us. Like I said, we're small but growing very quickly. So, come to our website. Find me on X or any of our other team members. But we're excited to engage and really appreciate the opportunity for having us on. All right. Thanks, Paisley. See you soon. Thanks.