Why Investors Haven’t Feasted on Two New Weight-Loss ETFs [Video]

Two new weight-loss exchange-traded funds (ETFs) launched in May have yet to whet investors’ appetite, possibly due to their expensive fees and concentrated bets.

The Roundhill GLP-1 & Weight Loss ETF (OZEM) and the Amplify Weight Loss Drug & Treatment ETF (THNR) were both launched May 21 to capitalize on the craze for obesity drugs. However, the funds have failed to attract large investments, with Roundhill’s total assets currently at $29 million, while Amplify has pulled in just $2.3 million.

The first problem for the new weight-loss drug ETFs has been a relatively high expense ratio of 0.59% for both. In comparison, the iShares US Healthcare ETF (IYH) has an expense ratio of 0.40% and boasts total assets of $3.3 billion.

Another issue has been the concentrated nature of the weight-loss ETFs, both of which are heavily exposed to two companies: Eli Lilly (LLY) and Novo Nordisk (NVO).

The two companies for now …