Investors can now invest in top India, US healthcare cos with new Edelweiss, MSCI thematic index fund

Global index provider Morgan Stanley Capital Investment (MSCI) and domestic asset manager Edelweiss have partnered to launch Edelweiss MSCI India Domestic & World Healthcare 45 Index Fund. The passive thematic index fund will provide an investment opportunity to invest in Indian healthcare companies and US healthcare firms. 70% of the fund’s weightage is on Indian Healthcare, comprising top 25 stocks based on full market capitalization, while the remaining 30% weightage will be on top 20 stocks listed in the United States comprising top 5 stocks each from Pharmaceuticals, Healthcare Equipment, Biotechnology and Life Sciences Tools and Services sectors.

Speaking at the launch of the fund, Harshad Patwardhan, CIO, Equities – Edelweiss AMC said that the aim is to club the fast growing Indian market and the innovative edge provided by US listed pharmaceutical companies. While the US is home to fast growing biologics and medical device companies, India is the market leader in pharmaceutical exports. “We believe that this fund will provide investors with an easy, low cost and undiluted access to promising healthcare companies in India and around the world. Given the rise in lifestyle diseases and the uptick in spending to treat them, the healthcare sector is primed to grow steadily over the next decade,” said Radhika Gupta, MD & CEO, Edelweiss Asset Management Limited.

The benchmark MSCI India Domestic & World Healthcare 45 Index which comprises 45 healthcare sector stocks listed across India and the US market. Of the 70% exposure to Indian healthcare companies, the top 25 stocks based on market capitalization are picked from sub-sectors such as Pharma, Hospitals, Diagnostics, Life science tools & Services and Biotechnology. From the 30% exposure that the fun index has to US healthcare companies, it will be investing in sub-sectors like Pharma, Healthcare equipment, Biotechnology and Life sciences tools & services. “A few of the top holdings of the underlying fund include Apollo Hospitals, CIPLA, Dr. Reddy’s Laboratories, Jubilant Life science, Biocon Ltd., and PFIZER,” Edelweiss said. Hardik Varma will be the fund manager for domestic investments and Mayur Dharmshi for overseas investments.

Further, Radhika Gupta while reiterating the benefits for the passive fund added that investors could get the benefit of transparency, while getting a true to the label fund with exposure to oly healthcare. On a 1 year rolling basis 38% of the times active funds have underperformed their benchmark, Edelweiss said. The NFO period for the fund starts tomorrow and will last till October 20. The minimum application amount for the fund is Rs 5,000.