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(Bloomberg) — A distinct segment issuer is launching a biotechnology exchange-traded fund whose key holdings embrace corporations benefiting from the hype round weight-loss medication.
The Tema Cardiovascular and Metabolic ETF (ticker HRTS) tracks corporations concerned within the remedy of cardio-metabolic ailments — a time period that hyperlinks cardiovascular ailments, weight problems and diabetes. The ETF, which has a novel investing mandate on the planet of thematic allocations, costs a 0.75% administration payment.
The actively managed fund has 20 to 25 core positions, together with Eli Lilly & Co. and Novo Nordisk A/S, in addition to Arrowhead Prescribed drugs Inc. and Bridgebio Pharma Inc., stated Maurits Pot, founder and chief govt officer of Tema ETFs.
Its launch coincides with a interval of heightened consciousness surrounding a brand new era of weight problems medication. The record contains Novo’s Ozempic — initially used to deal with diabetes — and Wegovy, in addition to Eli Lilly’s diabetes drug Mounjaro and Zepbound, which lately acquired approval to deal with weight problems. Novo’s American depositary receipts are up greater than 50% this yr whereas Eli Lilly’s shares rallied greater than 60%.
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Pot says HRTS is trying to put money into structural traits somewhat than journey momentum trades.
“We don’t deal with what’s sizzling at this time,” he stated in an interview.
Whereas HRTS already has well-established rivals just like the $6.4 billion iShares Biotechnology ETF (IBB) and the $6 billion SPDR S&P Biotech ETF (XBI), Pot stated Tema’s ground-up, research-driven strategy units it aside. The brand new fund’s portfolio supervisor is David Track, a physician who has over 25 years of life-sciences investing.
“I like that they’re utilizing a specialist for the respective theme,” stated Athanasios Psarofagis, Bloomberg Intelligence ETF analyst, referring to the portfolio supervisor. “It’s a really attention-grabbing play as a result of they’re taking thematics as much as one stage larger since its extra particular in comparison with different thematic funds.”
General, buyers have yanked $4.7 billion from thematic ETFs thus far this yr, in contrast with $2.4 billion final yr, in response to Bloomberg Intelligence information. Such funds had boomed through the pandemic, garnering $46 billion in 2020 and $49 billion in 2021, the info confirmed.
HRTS is the second fund in Tema’s life-sciences lineup. The New-York based mostly agency, which launched in 2023 and has round $40 million in property below administration, plans to debut a neurology-focused ETF — the third fund in its life-sciences roster — early subsequent yr, Pot stated.
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