The rising popularity of GLP-1 weight loss drugs has captured the attention of investors, leading Roundhill Investments to launch its GLP-1 & Weight Loss ETF (OZEM). This ETF combines market leaders Eli Lilly and Novo Nordisk with other emerging players, developing treatments for weight loss and diabetes.
Strategic Investment in GLP-1 Drugs
Roundhill Investments, known for its focus on exchange-traded funds (ETFs), has bet on the long-term growth of GLP-1 weight loss drugs with the launch of its new ETF, OZEM. According to CEO Dave Mazza, his firm is leveraging the explosive growth potential in this burgeoning industry. “The ability to have active management to overweight companies that are actually in the market producing the drugs and then go down the line to identify those that are in particular phases is powerful,” Mazza told CNBC’s “ETF Edge” last Monday.
Top Holdings of the ETF
According to Roundhill’s website, Eli Lilly and Novo Nordisk dominate the ETF, each holding roughly a 20% weighting. The three most prominent positions are Zealand Pharma, Amgen, and Chugai Pharmaceutical, weighing under 5%. This diversified approach captures established leadership and emerging innovations in the sector.
Performance of Market Leaders
Over the past year, Eli Lilly has risen 90%, while Novo Nordisk has gained 68% as of Friday’s market close. Despite these impressive figures, Mazza dismissed concerns that investors missed the rally. “The marketplace has plenty of room for growth with other companies coming in, whether with more powerful drugs or with things that you don’t need to have an injectable,” Mazza noted.
A Parallel with AI
Mazza also compared the growth of GLP-1 drugmakers to that of AI-linked stocks. “It’s a little bit like thinking about Nvidia with AI. They have a head start,” Mazza explained. “[Eli Lilly and Novo Nordisk] pivoted to focus on diabetes and weight loss drugs a few years ago, were able to get in the market and produce remarkable results.”
Future Prospects
Despite a modest start, with shares of the ETF ending last week down by almost 2%, the long-term prospects appear promising. Roundhill’s GLP-1 & Weight Loss ETF aims to capitalize on the growth potential in the weight loss drug industry by combining market leaders and innovations.
Roundhill Investments’ new GLP-1 & Weight Loss ETF highlights the growth potential in the weight loss and diabetes drug industry. With market leaders like Eli Lilly and Novo Nordisk, along with emerging innovators, this ETF offers investors an opportunity to capitalize on an expanding trend. As Dave Mazza stated, “The marketplace has plenty of room for growth,” emphasizing the long-term opportunity in this sector.
