In the weight loss space, there could also be a stronger argument for investing in individual company stocks reasonably than exchange-traded funds.
The Amplify ETF and Roundhill Investments filed prospectuses last week to launch funds focused on weight-loss firms, which Strategas ETF and technical strategist Todd Sohn said hinges on the performance of two dominant stocks: and .
“The main holdings will be Lilly and Novo Nordisk and probably one or two other big names … along with some downstream producers,” he told CNBC’s “ETF Edge” this week. “Ultimately, it all depends on these big giants who are playing with these drugs.”
With just two players currently leading the U.S. obesity drug market, ProShares’ Simeon Hyman questions the importance of weight loss ETFs for investors trying to enter the industry.
“I think that’s one of the challenges when you have an innovation like this,” the firm’s global investment strategist said in the same interview. “If the benefits go to incumbents, there may not be a theme in itself that needs to be exploited.”
Strategas’ Sohn also suggested that ETFs based on themes reasonably than sectors or indexes could also be losing favor with investors.
“I believe the material is a bit on the fringes without delay, especially the way they’ve performed over the previous few years. I believe there’s room for them, but when there’s a couple of, it would be difficult,” he said.
So far in 2024, Novo Nordisk is up 29% and Eli Lilly is up 30% since Wednesday’s close. The wider one is 7% higher in the same period.
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