These Public-Private ETFs Invest in Polymarket and Anduril

Tema Trading & Prediction Markets ETF

DICE

Prediction markets are increasingly being pitched as the next evolution in trading. Financial markets have already gone through several major changes, from the early organized stock trading that emerged in Amsterdam in the 1600s, to open-outcry trading pits, and eventually to today's electronic exchanges and app-based brokerages. Prediction markets extend the concept beyond traditional securities.

Instead of buying a stock based on what you think a company will be worth, you trade contracts tied to whether a specific event will occur. These can cover elections, economic data, Federal Reserve decisions, sports and other measurable outcomes. Contract prices fluctuate with supply and demand and can therefore be interpreted as market-implied probabilities.

That's the theme behind DICE. Launched in September 2026, the actively managed ETF owns 39 holdings spanning traditional exchanges, brokerages, crypto infrastructure and prediction markets.

I particularly like some of the established financial infrastructure companies here like Intercontinental Exchange. Businesses like these can function somewhat like toll booths on financial activity, collecting fees as investors trade rather than requiring a particular asset class to perform well.

But DICE also owns the newer generation of trading infrastructure. That includes crypto-oriented companies such as Coinbase Global, Galaxy Digital and Circle Internet Group, alongside retail brokerage exposure through Robinhood Markets and Interactive Brokers. Robinhood itself has been expanding aggressively into prediction markets, giving the portfolio another way to participate in their growth.

The holdings likely to attract the most attention, however, are DICE's two largest positions. Roughly 7.9% apiece is currently allocated to SPV exposure to Kalshi and Polymarket. Tema describes them as the dominant prediction markets by volume. Kalshi operates as a Commodity Futures Trading Commission-regulated exchange for event contracts, while Polymarket has built a large global prediction-market platform spanning politics, economics, sports and culture.

There's an important valuation wrinkle with DICE's private holdings. Kalshi and Polymarket don't have exchange prices updating every second. Tema values its SPV positions based on transaction cost, so those marks generally remain unchanged between transactions.

Tema has disclosed an implied valuation of $35 billion for its Kalshi exposure, while its Tema's current mark for the Polymarket SPV implies a valuation of about $12.82 billion. Its stated methodology means a new transaction or other qualifying valuation event can establish a new mark.

In practical terms, investors shouldn't interpret the apparently stable value of either SPV position as evidence that the underlying companies themselves aren't changing in value. Private-company pricing simply updates much less frequently than the rest of DICE's publicly traded portfolio.

At 0.75%, DICE isn't cheap, although that fee is fairly typical for a specialized actively managed thematic ETF offering difficult-to-replicate exposure. With only 39 holdings and around 15% of assets currently tied to Kalshi and Polymarket SPVs alone, this is also a concentrated bet.

Tema International Defense ETF

ARMY

-0.64%

Defense stocks have enjoyed a multi-year tailwind since Russia's invasion of Ukraine in 2022, followed by the Israel-Hamas war and, more recently, the U.S.-Israeli war with Iran. What began as higher near-term military spending has increasingly been described as a longer-term rearmament cycle.

Major prime contractors entered this period with substantial order backlogs, while governments have committed to replenishing depleted inventories and expanding capabilities ranging from air and missile defense to drones, cybersecurity and long-range weapons. NATO added another long-term catalyst at its 2025 Hague summit, when members committed to spending 5% of GDP annually on defense and security-related priorities by 2035, including at least 3.5% for core defense requirements.

My issue with many traditional U.S.-listed defense ETFs is their concentration in domestic prime contractors. You can end up with substantial exposure to familiar names such as Lockheed Martin, RTX, Northrop Grumman and General Dynamics, but comparatively little exposure to international contractors, intelligence and cybersecurity companies, or privately held defense technology startups.

ARMY takes a different approach. Launched in September 2025 and managed by Tema founder and CEO Maurits Pot, ARMY currently holds 35 positions. Its gross expense ratio is 0.75%, while its net expense ratio is currently capped at 0.68%.

The geographic mix immediately distinguishes it from a conventional U.S.-heavy defense ETF. U.S. exposure represents only around 16% of the portfolio, with larger allocations elsewhere, including the U.K., Germany, France and Israel. That brings in contractors such as BAE Systems, Dassault Aviation, Thales and Elbit Systems, providing exposure to the European and Israeli rearmament cycles.

But the holding that's likely to attract the most attention is ARMY's roughly 14.6% exposure to Anduril through an SPV. Anduril has become one of the highest-profile private defense technology companies by focusing on areas such as autonomous systems, drones, artificial intelligence-driven command software, submarines and air-defense platforms.

Its growth also reflects a broader shift in defense procurement toward venture-backed companies attempting to develop and deploy technology faster than the traditional prime-contractor model. That makes Anduril particularly interesting from a capital-markets perspective. Public investors have historically had relatively few opportunities to buy newly listed pure-play defense technology companies compared with sectors such as software or biotechnology.

Anduril remains private, so ARMY's SPV stake provides economic exposure without waiting for a potential future IPO. If Anduril eventually does pursue a public listing, it would bring one of the defense technology industry's most closely watched private companies into public markets. Until then, the SPV provides ARMY with exposure that most conventional defense ETFs simply don't have.

That's also why I think ARMY can make sense even for someone who already owns a traditional defense ETF. Its internationally focused portfolio, emphasis on newer areas such as autonomous systems, cybersecurity and intelligence, and substantial private Anduril exposure mean there can be relatively little overlap with the U.S. prime-contractor-heavy funds that dominate the category.

Please note that this article reflects the author’s personal views and does not represent the opinions of the publication or its affiliates. It is for informational purposes only and does not constitute investment advice. It is essential to seek guidance from a registered financial professional before making any investment decisions.