New Year, New Strategy: Navigating Weight Loss ETFs

Core Insights - The rise of GLP-1 agonists presents a significant investment opportunity in the healthcare sector, particularly for financial advisors to discuss with clients as weight loss resolutions gain attention in 2026 [1] - Weight loss ETFs are being evaluated by advisors to capitalize on the thematic shift in the market [1] Group 1: Weight Loss ETFs Overview - The Amplify Weight Loss Drug & Treatment ETF (THNR) tracks the VettaFi Weight Loss Drug & Treatment Index, focusing on companies involved in GLP-1 agonists and alternatives [2] - THNR has a net expense ratio of 0.59% and its top 15 holdings account for over 90% of the portfolio, ensuring alignment with the index [3] - The Roundhill GLP-1 & Weight Loss ETF (OZEM) employs an active management strategy, allowing for adjustments based on real-time data from clinical trials and FDA updates [4] Group 2: Portfolio Management and Performance - As of January 9, both OZEM and THNR share the same top two holdings, Novo Nordisk and Eli Lilly, with a 61% portfolio overlap, indicating a potential preference for a passive approach in this sector [5] - The Tema Heart & Health ETF (HRTS) offers a broader perspective by including treatments for diabetes and cardiovascular diseases, managed by Dr. David Song [6] - HRTS typically holds around 45 companies, providing a more diversified portfolio but has a higher net expense ratio of 0.75% and is underperforming compared to THNR and OZEM as of January 9 [7] Group 3: Investment Opportunities - Weight loss ETFs are seen as a compelling opportunity for investors to leverage the long-term growth in the obesity drug market, potentially serving as high-return satellite positions in investment portfolios [9]