Fund issuers are betting big that Investors want to get in on the action and invest in that new era of weight-loss drugs like Ozempic and Mounjaro.
The Tema Cardiovascular and Metabolic ETF (HRTS) launched on the Nasdaq last week, tapping into the burgeoning market trend propelled by the popularity of these super-popular weight-loss drugs.
HRTS, an exchange-traded fund, has strategically invested in approximately 20 companies specializing in the treatment of cardiovascular diseases, obesity, and diabetes, as per the ETF’s issuer’s statement. This portfolio includes significant holdings in Novo Nordisk, the maker of Ozempic and Wegovy, and Eli Lilly, the producer of Mounjaro. These stocks have experienced substantial gains in the wake of the heightened demand for GLP-1 drugs this year.
On its first trading day, HRTS recorded an opening price of $26.82 and maintained a stable performance in the initial hours of trading.
Contrasting this newcomer, established ETFs such as the iShares Biotechnology ETF and the SPDR S&P Biotech ETF have seen relatively flat performances since the beginning of the year. This trend reflects a broader shift in investor sentiment, as thematic ETF investments have become less favorable.
Bloomberg Intelligence reports a significant withdrawal of funds, with a net outflow of $4.7 billion from these ETFs in the current year, a stark contrast to the inflow of $49 billion witnessed in 2021.
In the pharmaceutical industry, the surge in GLP-1 drug popularity has reshuffled market leadership. Novo Nordisk has ascended to become Europe’s largest company, boasting a valuation of $452 billion. Similarly, Eli Lilly has climbed into the top 10 of the S&P 500 companies, now valued at $562 billion, highlighting the substantial impact of this drug category on the biopharmaceutical landscape.
