Yahoo Finance Play These New ETFs to Tap Lucrative Weight Loss Drug Market
Global obesity rates have nearly tripled since 1975 and are expected to affect over half the population by 2035, per WHO and Goldman Sachs. Pioneering GLP-1 treatments, such as Ozempic, Wegovy, and Zepbound, are now at the forefront of medical advancements in weight management.
GLP-1 medications, initially used to treat diabetes, were later discovered to suppress appetite and lead to considerable weight loss. Recent studies suggest that GLP-1 drugs may also slow the progression of Parkinson’s symptoms in humans and lower the risk of heart attack, stroke and cardiovascular death by approximately 20%.
No wonder, investors are closely monitoring these developments. After all, over 42% of U.S. adults and 1 billion people worldwide are obese now. There is intense competition among the companies producing GLP-1 medicines, and the stocks of many of these firms have experienced significant surges in recent months.
Inside the Investment Potential
Roundhill Investment believes that weight loss drugs, especially GLP-1 agonists, represent one of the most revolutionary advancements in the global pharmaceuticals industry. The GLP-1 drug market is anticipated to grow from $6 billion to $100 billion by 2030, per Goldman Sachs.
Two companies – Eli Lilly LLY and Novo Nordisk NVO – dominate the weight-loss drug market and their shares have surged over the past year due to soaring demand for their products. Shares of Eli Lilly are up about 85% over the past year, and shares of Novo Nordisk are up 58%.
ETFs in Focus
Against this backdrop, below we highlight a few pureplay weight-loss drug maker ETFs that can be tapped on this soaring trend.
Obesity & Cardiometabolic ETF HRTS
The Tema Obesity & Cardiometabolic ETF seeks to provide long-term growth of capital by investing in companies leading the fight against obesity and cardiometabolic diseases. The fund charges 75 bps in net fees. The fund has grown to $60 million since launching in November.
The fund has 44 holdings in total. Vertex Pharma (5.79%), Amgen (5.58%) and Eli Lilly (5.10%) are the top three stocks of the fund. United States takes the 78.22% of the fund, followed by Denmark (8.05%) and United Kingdom (3.64%).
Amplify Weight Loss Drug & Treatment ETF (THNR)
The newly-launched Amplify Weight Loss Drug & Treatment ETF seeks investment results that generally correspond to the performance of the VettaFi Weight Loss Drug & Treatment Index. The fund charges 59 bps in fees.
The 20-stock fund is heavy on Eli Lilly (15.22%) and Novo Nordisk A/S (14.87%). Drug manufacturers take about 70% of the fund while enablers take about the rest. United States takes the 51% of the fund, followed by Denmark (18%) and Japan (10%).
Roundhill GLP-1 & Weight Loss ETF (OZEM)
The 27-stock fund, which also made a recent entry, provides exposure to companies involved in the development of pharmaceutical drugs and/or supplements that can be utilized to help individuals lose weight, maintain an ideal weight, and/or maintain body composition during weight loss. OZEM is an actively-managed ETF. The fund charges 59 bps in fees.
This fund is heavy on Eli Lilly (20.66%) and Novo Nordisk A/S (20.21%). Pharma stock takes about 66.4% of the fund while biotechnology (30.9%) takes the next big chunk. United States occupies the 53% of the fund, followed by Denmark (26%) and Japan (6.9%).
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Novo Nordisk A/S (NVO) : Free Stock Analysis Report
Eli Lilly and Company (LLY) : Free Stock Analysis Report
Tema Obesity & Cardiometabolic ETF (HRTS): ETF Research Reports
