Many healthcare companies have been eagerly developing new weight loss drugs in an effort to cash in a potential $100 billion market opportunity in anti-obesity treatments. For investors who aren’t following all these companies, however, it can be difficult to determine which stock to buy. Do you invest in the established but expensive Eli Lilly (NYSE:LLY) or do you go with a smaller but riskier option in Viking Therapeutics (NASDAQ:VKTX)?
There’s an exchange-traded fund (ETF) which will give you exposure to those stocks and many others involved in weight loss and diabetes treatments and products. The Tema Obesity & Cardiometabolic ETF (NASDAQ:HRTS) was launched last year and it gives investors exposure to 45 different stocks, including Eli Lilly, which is its largest holding, accounting for 5.4% of the portfolio’s weight.
Year to date, the fund has generated a positive return of 16%. And in the long run, there can be even more potential for it to do well as the industry expands and these companies produce stronger numbers. While there is a growing number of weight loss treatments hitting the markets, it’s still fairly early for growth investors to start targeting this area of healthcare.
And with the ETF, you don’t have to worry about which new stocks to track and which ones may be the most promising to hang on to. With a net expense ratio of 0.75%, the fund isn’t too expensive given its narrow focus. This can be a great ETF to buy and hold for the long haul.
