One Fund Holds 90% of Obesity Drug Market for 0.59% Fee
Eli Lilly and Pfizer together command 90% of the growing obesity drug market. The Health Care Select Sector SPDR Fund (XLV) provides investors exposure to both companies with an annual expense ratio of just 0.59%.
Key Numbers
The Health Care Select Sector SPDR Fund (NYSEARCA:XLV) is the default healthcare allocation for millions of investors, and for good reason. XLV owns the entire S&P 500 healthcare complex in one ticker: insurers, device makers, biotech, and Big Pharma. It has returned 21.61% over the past year and 159.84% over ten years.
Market Details
According to a report by 24/7 Wall St., Eli Lilly (NYSE:LLY) and Pfizer (NYSE:PFE) together control 90% of the booming obesity drug market. This gives XLV significant exposure to this promising sector, as both stocks are part of the fund's portfolio.
Fund Advantages
In addition to broad exposure, XLV boasts a very low expense ratio of just 0.59% annually, making it a cost-effective option for investors looking to invest in healthcare without picking individual stocks.
Context
The obesity drug market is experiencing explosive growth as demand for effective weight-loss treatments rises. Eli Lilly leads with its drug Zepbound, while Pfizer is developing its own treatments. Amgen (NASDAQ:AMGN) is also entering the space.
What It Means for Investors
XLV offers an easy, low-cost way for investors to benefit from the growth of the obesity drug market without having to pick winners. However, investors should consider the risks associated with sector concentration.
Frequently Asked Questions
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