Opportunity in Pharma & Healthcare Sector
- Introduction
- NFO Play in Pharma & Healthcare
- COVID-19 disruption
- Edelweiss MSCI India & World Healthcare 45 Index Fund
- Conclusion
Pharma and healthcare sector have not done yet. Back in 2018, I started covering the pharma sector and a slightly positive view started to build in the sector. The odds were not in favour of such step in terms of the majority of investors. The reasons were obvious and the sector was a high risk that nobody wanted to take at that time.
But if you had started at that time, then you may be the one who entered with great luck and now can prove the logic of investing.
NFO Play in Pharma and Healthcare Sector
The NFO launched in pharma and healthcare sector in the last few years was an obvious hint that you can correlate with. There was an opportunity for any value investor. The recent COVID-19 effect was sudden and purely unexpected, but faith must be there in the fundamentals of the sector, and its a long term play for you even if you are starting now.
ICICI Mutual fund launched ICICI Prudential Pharma and Healthcare (P.H.D) fund in July 2018. Then Aditya Birla Mutual fund came with a pharma based sector fund in July 2019. There are also other funds if you want to focus on the domestic pharma sector.
Edelweiss MSCI India and World Healthcare 45 Index Fund
Now edelweiss is coming with NFO in this sector, but this fund will be an index fund. The one more characteristic is that it will take a 30 % exposure in global pharma companies. The fund is first of its kind in this sector for domestic mutual fund investor.
New fund offer (NFO) from Edelweiss AMC in the pharma sector is a passive equity fund based on MSCI India domestic and World Healthcare Index.
a) MSCI India domestic index weightage - 70%
Top 25 stocks from Sub-sectors, Pharma, Hospitals, Diagnostics, LifeScience tools & Services, and Biotechnology
b). MSCI World index weightage- 30%
20 Global Pharma Stocks listed in the US
Research and Development is one area where global companies have been putting more resources. Additionally, the advantage of the large market for global pharma companies may add value to a long term investor.
Indian pharma is one of the most successful India story built by entrepreneurs and major pharma companies. In terms of health care services reach, India remains a market of several opportunities waiting for market players to catch up. So a its a long term story and will remain a key player in terms of government policy support and initiatives.