ETFs
Fighting obesity with ETFs
Losing weight has long been a challenge for many people, myself included. Indeed, an estimated one billion people suffer from obesity, and the Obesity World Atlas estimates that this figure could reach 1.9 billion by 2035. Not only is this harmful to the health of our citizens, but it also comes at a considerable cost to the global economy. Obesity is unfortunately linked to heart disease and diabetes.
However, according to Novo Nordisk, less than 2% of obesity cases are treated by medications for weight loss. Most cases are not treated.
The good news is that a growing number of companies have demonstrated that their medications can help treat diabetes and even help lose weight. You’ve probably seen ads for Ozempic (by Novo Nordisk) or Zepbound (by Eli Lilly) on TV. So will investors, as the stock prices of these companies have risen significantly in 2024.
Rapid growth of the industry
According to Goldman Sachs, the market for anti-obesity drugs could increase to $100 billion by 2030. They estimate that approximately 15 million adults in the United States alone could be treated with AOMs (anti-obesity drugs) by 2030, representing a penetration of Approximately 13% of the eligible obese/overweight adult population in the United States. Other factors that may drive sales include insurance reimbursement rates, duration of patient use, and drug prices.
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Eli Lilly and Novo Nordisk are the most well-known companies related to this industry. However, they are not alone. The Tema Obesity & Cardiovascular ETF (SHR ), launched in November 2023, holds 44 titles. These are currently also next-generation companies like Amgen and Viking Therapeutics. HRTS has over $60 million in assets.
There are $84 billion in thematic ETFs listed in the United States. Many focus on disruptive technology themes like artificial intelligence, cloud computing and robotics. HRTS is the first of these health-themed ETFs that focuses on combating obesity and related diseases. Based on regulatory filings, Amplify and Roundhill will launch other products soon. VettaFi is the index provider behind the pending Amplify product.
First ETF takes active thematic approach
HRTS Director Dr. David Song is a medical doctor with 25 years of experience investing in biotechnology and healthcare. Given the rapid evolution of these trends and the likely emergence of new drugs, investors may want to learn more about an active approach.
This week, VettaFi is hosting a webcast with Thema. On May 15 at 2 p.m. ET, we’ll dive deeper into this emerging investing trend. We will also discuss the difference between a healthcare thematic strategy and general sector ETFs such as the Health Care Select Sector SPDR (XLY A) or even more targeted sector funds like the iShares Biotechnology ETF (IBB A-). Sign up today to learn more.
For more news, information and analysis, visit Vettafi | ETFDB.