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Introducing OZEM: The GLP-1 Skinny

Addressing the Obesity Epidemic

The global obesity epidemic has reached alarming proportions. Since 1975, obesity rates have nearly tripled and are projected to impact over half the population by 2035.1 This escalating health crisis not only increases the risk of diseases such as diabetes, heart disease, and certain cancers, but also places a significant economic burden on healthcare systems worldwide. The growing prevalence of obesity underscores a critical demand for effective treatment solutions, making the development of innovative pharmaceuticals a high-priority area in healthcare.

Revolutionary GLP-1 Treatments

In the battle against obesity, GLP-1 (glucagon-like peptide-1) treatments have emerged as a revolutionary new technology. Drugs like Ozempic, Wegovy, Monjauro and Zepbound represent significant advancements in weight management therapeutics, offering new solutions for effective weight management. These drugs work by mimicking the action of the natural hormone GLP-1, which regulates appetite and calorie intake, thereby helping to reduce body weight significantly compared to traditional methods such as diet and exercise alone.

Unlike diet and exercise, and previous therapies that often offered minimal and short-lived weight loss benefits, GLP-1 treatments have proven to be a game-changer. They not only promote substantial weight loss but also improve metabolic health, reducing the risk and severity of type 2 diabetes. These benefits are crucial, considering the close link between obesity and diabetes.

OZEM Blog 1

Source: WHO, Global Health Observatory (2022), Ourworldindata.com. Estimated prevalence of obesity, based on general population surveys and statistical modeling. Obesity is a risk factor for chronic complications, including cardiovascular disease, and premature death.

 

Market Growth

The market for obesity treatments is poised for explosive growth. Goldman Sachs Research predicts that the market could expand more than 16 times its current size, potentially reaching up to $100 billion by 2030. This anticipated expansion is driven by increasing global obesity rates and the effectiveness of GLP-1 treatments, which have garnered strong interest from both the medical community and patients.

Companies involved in the development and manufacturing of GLP-1 drugs are well-positioned to benefit from this growing market. With patents securing their innovations, these companies enjoy a competitive edge and the potential for high profit margins. The success of their products translates into robust sales growth, which, in turn, drives stock performance and makes them attractive investment opportunities.

OZEM Blog 2

Source: Goldman Sachs Global Investment Research; Company data.

 

Investment Opportunity – The Roundhill GLP-1 & Weight Loss ETF (OZEM) 

For investors looking to capitalize on the burgeoning sector of obesity treatment, the Roundhill GLP-1 & Weight Loss ETF (OZEM) offers exposures to leading companies that are at the forefront of the obesity treatment space, including developers of GLP-1 drugs. This exposure ensures that investors benefit from the growth of the market leaders, which are likely to capture significant market shares as the sector expands.

 

Why OZEM? 

  • Active Management: In a nascent and rapidly evolving field like GLP-1 therapies, active management is crucial. The team behind OZEM actively monitors the market, adjusts holdings, and capitalizes on emerging opportunities more than a static index-based fund can do.
  • Diversification: Investing in a single company or two can be risky, especially in a high-stakes, high-reward sector like pharmaceuticals. OZEM provides diversified exposure to a range of companies in the GLP-1 and broader weight loss drug market, mitigating the risks associated with individual stock volatility and enhancing the potential for stable returns.
  • Cost Effective: With an expense ratio of 0.59%, OZEM offers a cost effective way to gain exposure to this high-growth market.

Investing in GLP-1 and weight loss drug manufacturers offers a compelling opportunity for several reasons. The urgent need for effective obesity treatments, combined with revolutionary advancements in GLP-1 therapies, creates a strong growth trajectory for this market. As the obesity epidemic continues to escalate, the importance of innovative and effective treatments cannot be overstated. Investing in the companies that are leading these advancements offers not only the potential for significant financial returns but also the opportunity to contribute to a broader societal impact by supporting the development of solutions that can improve millions of lives worldwide.

 

1 WHO.

Investors should consider the investment objectives, risk, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about Roundhill ETFs please call 1-855-561-5728 or visit the website at www.roundhillinvestments.com/etf/OZEM. Read the prospectus or summary prospectus carefully before investing.

Health Care Companies Risk. Health care companies, such as companies providing medical and healthcare goods and services, companies engaged in manufacturing medical equipment, supplies and pharmaceuticals, as well as operating health care facilities and the provision of managed health care, may be affected by government regulations and government health care programs, increases or decreases in the cost of medical products and services and product liability claims, among other factors. Many health care companies are heavily dependent on patent protection, and the expiration of a company’s patent may adversely affect that company’s profitability. Health care companies are also subject to competitive forces that may result in price discounting, may be thinly capitalized and susceptible to product obsolescence.

Pharmaceutical Companies Risk. The Fund may have significant exposure to pharmaceutical companies in connection with its investments in GLP-1 & Weight Loss Companies. Pharmaceuticals companies may be affected by industry competition, dependency on a limited number of products, obsolescence of products, government approvals and regulations, loss or impairment of intellectual property rights and litigation regarding product liability. Pharmaceutical are subject to competitive forces that may make it difficult to raise prices of their products and may result in price discounting. The profitability of some pharmaceuticals companies may be dependent on a relatively limited number of products. The research and development costs required to bring a new product to market are substantial with no guarantee that the product will ever become profitable. Many new products are subject to gaining the approval of the U.S. Food and Drug Administration (“FDA”), which can be long and costly. Many pharmaceutical companies are heavily dependent on patents and intellectual property rights. The loss or impairment of these rights may adversely affect the profitability of these companies. Pharmaceuticals companies may also be subject to extensive litigation based on product liability and similar claims.

Biotechnology Companies Risk. The Fund may have significant exposure to biotechnology companies in connection with its investments in GLP-1 & Weight Loss Companies. Biotechnology companies invest heavily in research and development which may not necessarily lead to commercially successful products. Biotechnology companies are subject to increased governmental regulation which may delay or inhibit the release of new products. The effects of high development costs and increased regulation may be exacerbated by a company’s inability to raise prices to cover costs because of managed care pressure or price controls. Many biotechnology companies are dependent upon their ability to use and enforce intellectual property rights and patents. Any impairment of such rights may have adverse financial consequences. Biotechnology stocks, especially those issued by smaller, less-seasoned companies, tend to be more volatile than the overall market. Biotechnology companies can also be significantly affected by technological change and obsolescence, product liability lawsuits and consequential high insurance costs.

Concentration Risk. The Fund is concentrated in the industry or group of industries comprising the health care sector. The Fund may be susceptible to an increased risk of loss, including losses due to adverse events that affect the Fund’s investments more than the market as a whole, to the extent that the Fund’s investments are concentrated in the securities and/or other assets of a particular issuer or issuers, country, group of countries, region, market, industry, group of industries, sector, market segment or asset class.

New Fund Risk. The Fund is a recently organized investment company with a limited operating history. As a result, prospective investors have a limited track record or history on which to base their investment decision.

Roundhill Financial Inc. serves as the investment advisor. The Funds are distributed by Foreside Fund Services, LLC which is not affiliated with Roundhill Financial Inc., U.S. Bank, or any of their affiliates.

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Carefully consider the investment objectives, risks, charges and expenses of Roundhill ETFs before investing. This and other information about each fund is contained in the Prospectus. Please read the prospectus carefully before investing as it explains the risks associated with investing in the ETFs.

These include risks related to investments in small and mid-capitalization companies, which may be more volatile and less liquid due to limited resources or product lines and more sensitive to economic factors. Funds investments may be non-diversified, meaning its assets may be concentrated in fewer individual holdings than a diversified fund and, therefore, more exposed to individual stock volatility than diversified funds. Investments in foreign securities involves social and political instability, market illiquidity, exchange-rate fluctuation, high volatility and limited regulation risks. Emerging markets involve different and greater risks, as they are smaller, less liquid and more volatile than more develop countries. Depositary Receipts involve risks similar to those associated with investments in foreign securities, but may not provide a return that corresponds precisely with that of the underlying shares. All investing involves risk, including possible loss of principal. Please see the prospectus for specific risks related to each fund.

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