The Fund employs a “passive management” (or indexing) investment approach designed to track the performance, before fees and expenses, of the Solactive Industrial Robotics & Automation Index, or any successor thereto (the “Index”). The Index is based on a proprietary methodology developed and maintained by Solactive AG (the “Index Provider”), which is an organization that is independent of, and unaffiliated with, the Fund and Themes Management Company, LLC, the Fund’s investment adviser (the “Adviser”).

The Index

The Index is designed to provide exposure to companies whose products and services are focused on robotics and automation solutions in an industrial context, including those that have business operations in factory automation equipment, semiconductors, industrial machine parts, and programable logic devices. The Index is an equally-weighted index that is denominated in U.S. dollars. As of June 30, 2023, the Index was comprised of 30 companies with a market capitalization range of between approximately $700 million and $1 trillion and a weighted average market capitalization of approximately $65.8 billion.

In constructing or adjusting the Index, the Index Provider identifies an “Index Universe” of companies that, on Selection Days (as defined below), fulfill the following requirements: 1) are listed on an exchange in a country classified as a developed country according to the Index Provider (Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Poland, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom and the United States); 2) have a minimum Average Daily Value Traded of at least $5,000,000 over 1 month and over 6 months prior to and including the Selection Day. The Average Daily Value Traded for an index component is the sum of daily value traded over the specified period divided by the number of trading days that fall in the specified period; 3) have a market capitalization of at least $1 billion; 4) have a free float percentage of at least 10%; and 5) are classified in one of the following sectors based on the FactSet Revere Business Industry Classification System (“RBICS”): Factory Automation Equipment; General Semiconductors; Industrial Machine Parts and Support Equipment; Processor Semiconductors; Programmable Logic and ASIC Semiconductors; and Specialized Conductors (“Robotics and Automation Companies”). In order to be classified in one of the above sectors, RBICS requires that the company generate at least 50% of its revenue from that sector.

The Index Provider further screens the Index Universe based on the following criteria in order to determine the components of the Index (“Index Components”). On the Selection Days, Index Components are selected by the Index Provider based on the following rules: 1) Companies with a negative total return over the 12 month period preceding the Selection Day are excluded. The return realized on the Selection Day itself is included in the calculation of the Total Return for each company; 2) All companies are ranked based on their security-level market capitalization in descending order, such that those companies with the highest market capitalization receive the highest rank; and 3) The 30 highest ranking companies are selected as Index Components subject to the constraint that not more than 9 companies from the same industry enter the Index. In a situation where 9 companies from the same industry are already included in the Index and another company from this industry is among the 30 highest-ranking stocks, the next highest-ranking company from another industry is included (if less than 9 stocks from this other industry are included). Should the process above yield less than 30 index members, the following steps are applied: i. The maximum number of stocks from each industry is increased from 9 to any number that allows to select 30 Index Components and, ii. Instead of excluding stocks with a negative 12-month Total Return (as defined above), these companies are eligible to be selected as Index Components. In this case, the security with the smallest negative returns is allowed to be added to the Index first. This process is repeated until 30 Index Components are reached.

The composition of the Index is adjusted quarterly. The composition of the Index is reviewed on the Selection Day and necessary changes are announced. “Selection Day” is the first Friday in January, April, July, and October. Adjustment day is the second Friday in January, April, July and October. On each Adjustment Day each Index Component is weighted equally. The determination of the Index Universe and the selection of Index Components is made by the Index Provider based on its proprietary methodology. Index Components may change over time.

The Fund’s Investment Strategy

The Fund will invest, under normal circumstances, at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in securities that comprise the Index and in American Depositary Receipts (“ADRs”) and Global Depositary Receipts (“GDRs”) based on the securities in the Index. The Fund will also invest, under normal circumstances, at least 80% of its net assets, plus borrowings for investment purposes, in securities of Robotics and Automation Companies and in ADRs and GDRs based on such securities. Index securities include equity securities of companies that have business operations in factory automation equipment, semiconductors, industrial machine parts, and programable logic devices and may include large-, mid- and small-capitalization companies. The Fund’s 80% Policies are non-fundamental and require 60 days prior written notice to shareholders before each can be changed.

The Fund uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. Unlike many investment companies, the Fund does not try to beat the Index and does not seek temporary defensive positions when markets decline or appear overvalued. Indexing may eliminate the chance that the Fund will substantially outperform the Index but also may reduce some of the risks of active management, such as poor security selection. Indexing seeks to achieve lower costs and better after-tax performance by aiming to keep portfolio turnover low in comparison to actively managed investment companies.

The Fund will generally use a “replication” strategy to achieve its investment objective, meaning it will invest in all of the component securities of the Index in the same approximate proportion as in the Index. However, the Fund may utilize a representative sampling strategy with respect to the Index when a replication strategy might be detrimental or disadvantageous to shareholders, such as when there are practical difficulties or substantial costs involved in compiling a portfolio of equity securities to replicate the Index, in instances in which a security in the Index becomes temporarily illiquid, unavailable or less liquid, or as a result of legal restrictions or limitations (such as tax diversification requirements) that apply to the Fund but not the Index. The Adviser expects that, over time, the correlation between the Fund’s performance and that of the Index, before fees and expenses, will be 95% or better. If the Fund uses a replication strategy, it can be expected to have greater correlation to the Index than if it uses a representative sampling strategy.

The Fund is considered to be non-diversified, which means that it may invest more of its assets in the securities of a single issuer or a smaller number of issuers than if it were a diversified fund. To the extent the Index is concentrated (i.e., holds 25% or more of its total assets) in a particular industry or group of industries, the Fund is expected to be concentrated in that industry or group of industries to approximately the same extent that the Index concentrates in an industry or group of industries. As of June 30, 2023, a significant portion of the Index is represented by securities of companies that have business operations in the robotics & artificial intelligence and semiconductor industries, and the information technology and industrials sectors. The degree to which components of the Index represent certain sectors or industries may change over time.

The Fund may lend securities representing up to one-third of the value of the Fund’s total assets (including the value of any collateral received).