What is Healthcare ETF?

What is Healthcare ETF

ICICI Prudential Mutual Fund and Axis Mutual Fund have launched Healthcare ETFs. The ETFs will track the Nifty Healthcare Total Return Index (TRI) to give returns that correspond to the benchmark, subject to tracking errors.

The NFO period of Axis Healthcare ETF will end on 10 May 2021, while the new fund offer period of ICICI Prudential Healthcare ETF will close on 14 May 2021.

What is the objective of these ETFs?

These healthcare ETFs aim to provide investors exposure to the different aspects of the healthcare sector, such as pharmaceutical companies, diagnostic centres and hospitals. It is a step above existing pharma funds as pharma funds invest in pharmaceutical companies while healthcare ETF offers exposure to the entire healthcare sector.

What is the Nifty Healthcare Total Return Index?

The Nifty Healthcare Index comprises a maximum of 20 largest companies related to health care listed on the National Stock Exchange.

The index was launched on 18 November 2020, and the index is rebalanced on a semi-annual basis.

Here are the top constituents of the index by weightage.  

Abbott India, Alkem Laboratories, Dr. Lal Path Labs, Fortis Healthcare, Glaxosmithkline Pharmaceuticals, Glenmark Pharmaceuticals, Ipca Laboratories, NATCO Pharma, Pfizer, Sanofi India Ltd and Torrent Pharmaceuticals are the other companies that make up the index.

What is the minimum investment amount?

You can invest a minimum amount of Rs. 5000 during the NFO period.

Who can invest in Healthcare ETF?

As per the fund houses, healthcare ETF is suitable for investors seeking a long-term wealth creation solution by investing in the Nifty Healthcare Index stocks.

Interested investors can invest up to 10% of their equity portfolio allocation in Healthcare ETF.

As healthcare ETF is a sectoral ETF with a concentrated portfolio, matured investors with high-risk tolerance can invest in this ETF.

New investors can stay away from these ETFs.

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