Tema launches its second targeted healthcare fund: the Tema Cardiovascular and Metabolic ETF (HRTS)

Tema - Press release
By Tema - Press release
November 21, 2023

Tema ETFs (“Tema”) is excited to announce the launch of its actively managed Tema Cardiovascular and Metabolic ETF (HRTS), on Nasdaq. HRTS is the first ETF globally seeking to provide long-term growth by investing in companies that lead the fight against obesity and diabetes, or metabolic diseases, and cardiovascular diseases. The HRTS portfolio will be managed by David K. Song, MD, PhD, CFA, who has led biotechnology and healthcare investment teams throughout his extensive 25-year career, including roles at Rockefeller Capital Management, Millennium and Balyasny. The portfolio will be balanced across key technologies and company profiles, ranging from diagnostics and care to therapeutics and clinical products, and with exposure to both established and emerging biopharma companies.

“We are happy to expand our thematic healthcare fund offering with the HRTS ETF following the launch of our oncology ETF CANC.” said Maurits Pot, Chief Executive Officer and founder of Tema. “Cardiovascular and metabolic diseases are closely intertwined, combining a larger, well-established area of healthcare with a burgeoning new biopharma sector, obesity. This area has seen a recent burst of innovation transforming patient lives and outcomes. We believe exposure to these growth areas needs to be carefully risk managed by a portfolio manager with expertise in the field, in order to navigate a confluence of, scientific, regulatory and financial risks. In our view, these secular growth opportunities are hard to access through indexation and therefore underrepresented in existing healthcare ETFs.”

Cardiovascular and metabolic diseases are a chronic burden on patients and society and the leading cause of death globally[1]. Obesity, characterized by the CDC as “a common, serious, and costly chronic disease of adults and children”, is a key underlying condition of both diabetes and cardiovascular disease. Nearly 80% of patients that have some form of coronary heart disease (CHD) are obese or overweight[2]. Obesity prevalence has been increasing at a dramatic pace with 42% of US adults classified as obese today[3].

Spend on cardiovascular diseases, the leading cause of death globally, is nearing $1 trillion per annum[4]. But we believe the biopharmaceutical industry is only in the early innings of realizing breakthrough medications for obesity. These innovations could ultimately revolutionize the treatment of patients with comorbid conditions like diabetes, heart disease, liver and other chronic illnesses afflictions. Leading the wave of obesity innovation are the GLP-1[5] agents such as Novo Nordic’s semaglutide (the active ingredient in Ozempic and Wegovy). In addition, insights into human genetics, as well as tools like gene editing and gene therapy, have spurred a new generation of therapeutics in cardiovascular disease.

“As a result of the unmet need and the revolution in obesity treatments the landscape has exploded with new drugs, diagnostics and medical devices. This has created an ever-expanding investable ecosystem for metabolic and cardiovascular disease.” said David K. Song, HRTS portfolio manager. “The breakthrough in obesity therapeutics leads us to believe that there could be significant growth given the large patient pool and currently low penetration rates. We believe, given that there are over 100 million US citizens with obesity[6], even assuming some discount in current prices, the total addressable market in the US alone could be well over $100 billion per annum.[7] We believe the fight against the metabolic epidemic is having its watershed moment, creating a new pool of investment opportunities on compelling valuations, requiring expertise and diligent risk management to navigate.”

r more information about HRTS or other offerings, please visit www.temaetfs.

Footnotes

[1] Our world in data, 2019.

[2] Prev Med. 2017 Nov; 104: 117–119, “Obesity in Coronary Heart Disease: An Unaddressed Behavioral Risk Factor”, Philip A. Ades, MD and Patrick D. Savage, MS.

[3] CDC; Prevalence of Self-Reported Obesity Among U.S. Adults by State and Territory, BRFSS, 2011 and 2021.

[4] LHS - World Economic Forum and the Harvard School of Public Health. “The Global Economic Burden of Non-communicable Diseases”, 2011. Bloom, D.E., Cafiero, E.T., Jané-Llopis, E., Abrahams-Gessel, S., Bloom, L.R., Fathima, S., Feigl, A.B., Gaziano, T., Mowafi, M., Pandya, A., Prettner, K., Rosenberg, L., Seligman, B., Stein, A.Z., & Weinstein, C. (2011).

[5] GLP-1: Glucagon-like peptide 1 is a hormone produced in the gut and released in response to food. It causes reduced appetite and the release of insulin.

[6] CDC, 2023.

[7] IQVIA Forecast Link, May 2023. Forecasts are inherently limited and should not be relied upon when making investment decisions. There is no guarantee projected growth will occur.