ETFs
ETFs targeting weight loss are gaining ground
What is happening here?
WE
active
managers are launching ETFs focused on the weight loss market, marking a major step forward in a growing investment space.
What does that mean?
The weight loss industry is getting stronger financially and asset managers want a piece of the pie. Amplify ETFs rolled out the Amplify Weight Loss Drug & Treatment ETF, while Roundhill Investments introduced the Roundhill GLP-1 & Weight Loss ETF. Investors now have new ways to tap into the profitable anti-obesity drug market. Amplify’s ETF tracks the VettaFi Weight Loss Drugs and Treatments Index, with a 30% nod to ancillary businesses such as GLP-1 drug manufacturing and distribution. Roundhill’s actively managed ETF focuses on pharmaceutical companies, highlighting giants like Eli Lilly & Co and Novo Nordisk. This surge in sector funds echoes a broader trend: Although Janus Henderson previously canned its obesity-focused fund, Tema relaunched its version, quickly amassing more than $63 million in assets.
Why should I care?
For the markets: Shaping the ETF landscape.
The rise of weight loss ETFs highlights their investment appeal, providing exposure to high-potential pharmaceutical stocks. But, like other trend ETFs, this sector could face
volatility
. In early 2024, funds focused on trends such as cybersecurity, remote work, animal care and cannabis saw outflows of $2.4 billion, following $4.9 billion in losses in 2023.
The big picture: Bet on a healthier future.
Investing in weight loss ETFs fits well into a global shift towards health and wellness. As obesity rates rise worldwide, the demand for effective obesity medications and treatments increases. Whether these ETFs can keep investors
interest
they could
profit
not only current market leaders, but also future medical advances that may generate long-term gains.