Investing in the Peptide Boom: REX Files for New Peptide ETF

On July 27, REX Shares filed for the REX Peptides ETF tracking the VettaFi Peptides Index. The fund targets companies strategically positioned to advance the development, manufacturing, and commercial adoption of peptide-based products. Peptides, short chains of amino acids linked together in a specific sequence, appear in a range of products including medicines, dietary supplements, and skincare.

REX Shares filed for the REX Peptides ETF, which tracks the VettaFi Peptides Index and uses a full-value-chain approach to invest in drug developers, infrastructure providers, oral delivery specialists, and cosmeceutical firms. The growth of GLP-1 weight loss medications has transformed the peptide market. Adoption of the medications among U.S. adults rose from 3% in 2024 to 11% in 2026.

A recent FDA advisory committee recommendation to allow specialized compounding pharmacies to legally produce certain wellness peptides could potentially signal a shift from an unregulated grey market toward mainstream, regulated therapies.

Rather than providing exposure to just the pharmaceutical companies selling peptides, the index takes a full-value-chain approach. The index targets companies across four distinct segments: drug developers, infrastructure providers, oral delivery specialists, and cosmeceutical firms. For inclusion in the index, companies must have a minimum market capitalization of $100 million and a three-month average daily traded volume of at least $1 million. To balance exposure, the index sorts constituents into two tranches: core and diversified. The core tranche requires constituents to derive 50% or more of total revenue directly from the four segments or dedicate 50% or more of total annual R&D capital expenditures (or phase 1–3 clinical pipeline programs) specifically to peptide advancement. The core tranche captures the pure-play peptide firms. Meanwhile, the diversified tranche captures the broader industry participants. For inclusion in the diversified tranche, constituent must either derive 10% to 49% of total revenue from the four segments, commit 10% to 49% of R&D or clinical pipelines to peptide development, or generate less than 10% of total revenue from peptides, while maintaining a top-three global market share in one of the four segments. Holdings are weighted based on their free-float market capitalization at each quarterly rebalance, with an 80% weight allocated to the core tranche and a 20% weight to the diversified tranche. To reduce concentration risk, the strategy limits individual constituents to a maximum weight of 12% in the core tranche and a lower maximum weight of 5% in the diversified tranche. The total weight of holdings exceeding 5% is capped at 45%, with excess weight proportionally redistributed to lower-weight constituents at the rebalance.

The explosive demand for GLP-1 weight loss drugs has transformed peptides from a niche pharmaceutical category to a mainstream market. The percentage of U.S. adults that currently take GLP-1 for weight loss purposes has grown from 3% in 2024 to a shocking 11% in 2026, according to a Gallup survey. Financially, the momentum has continued. The global GLP-1 market could grow from $79 billion in 2025 to $190 billion by 2035, according to Morgan Stanley Research. The rapid growth in demand for GLP-1 drugs has led to mass global supply shortages. In response, pharmaceutical juggernauts and contract development and manufacturing organizations (CDMOs) have begun a multi-billion dollar buildout of peptide manufacturing and delivery infrastructure.

The FDA Pharmacy Compounding Advisory Committee held a two-day meeting on July 23–24. There, it voted to recommend adding six out of seven non-FDA approved wellness peptides to the federal list of substa...