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(Bloomberg) — A distinct segment issuer is launching a biotechnology exchange-traded fund whose key holdings embody companies benefiting from the hype round weight-loss medicine.
The Tema Cardiovascular and Metabolic ETF (ticker HRTS) tracks firms concerned within the therapy of cardio-metabolic illnesses — a time period that hyperlinks cardiovascular illnesses, weight problems and diabetes. The ETF, which has a novel investing mandate on this planet of thematic allocations, prices a 0.75% administration price.
The actively managed fund has 20 to 25 core positions, together with Eli Lilly & Co. and Novo Nordisk A/S, in addition to Arrowhead Prescription drugs Inc. and Bridgebio Pharma Inc., mentioned 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 medicine. The checklist contains Novo’s Ozempic — initially used to deal with diabetes — and Wegovy, in addition to Eli Lilly’s diabetes drug Mounjaro and Zepbound, which not too long ago 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 seeking to put money into structural developments fairly than experience momentum trades.
“We don’t give attention to what’s sizzling as we speak,” he mentioned 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 mentioned Tema’s ground-up, research-driven strategy units it aside. The brand new fund’s portfolio supervisor is David Tune, a health care provider who has over 25 years of life-sciences investing.
“I like that they’re utilizing a specialist for the respective theme,” mentioned Athanasios Psarofagis, Bloomberg Intelligence ETF analyst, referring to the portfolio supervisor. “It’s a really fascinating play as a result of they’re taking thematics as much as one degree greater since its extra particular in comparison with different thematic funds.”
General, buyers have yanked $4.7 billion from thematic ETFs up to now this yr, in contrast with $2.4 billion final yr, based on Bloomberg Intelligence information. Such funds had boomed throughout the pandemic, garnering $46 billion in 2020 and $49 billion in 2021, the information confirmed.
HRTS is the second fund in Tema’s life-sciences lineup. The New-York primarily based 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 mentioned.
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