Axis Mutual Fund on Friday will launch Axis Healthcare Exchange Traded Fund (ETF), which will allow access to investors in the healthcare sector. The open-ended ETF, which will close on 10 May , will track Nifty Healthcare Index and will be managed by Jinesh Gopani, head–equity, Axis AMC.
The minimum investment in the passive fund is ₹5,000 and in multiples of Re 1, thereafter.
According to the company, the fund will be suitable for investors who are seeking, long-term wealth creation solution through targeted sectoral exposure to the healthcare sector.
On the launch of the fund, Chandresh Kumar Nigam, MD and CEO, Axis AMC, said: “We want to develop, introduce and provide the products that are relevant in the current context as well as in the long term. Accordingly, we recognize the need to offer investors a choice of strategies including robust passive products. Our ETF strategy relies on offering highly innovative yet relatable products to our target investors and we have already seen a number of launches in this space in the last year.”
The Nifty Healthcare Index comprises of 20 largest healthcare-oriented companies by free-float market capitalization, including hospitals, diagnostics players, pharmaceutical manufacturers and the R&D players.
According to the fund house, the healthcare sector is at the cusp of building its domestic footprint after capturing significant economic interest and credibility in overseas markets.
“Hospitals are the bedrock of medical infrastructure. Given the large population and the lack of quality medical care, the hospital sector offers significant headroom for long-term growth,” Axis MF said in the product presentation.
On the diagnostics sector, the fund house said that the companies as of now are concentrated in urban areas, while deeper push into tier-III or tier-IV cities as well as rural heartland is likely to trigger the next leg of growth.
Commenting on the drug makers, Axis MF said, with global pharma companies looking to diversify their supply chains from China, post-pandemic, Indian companies are ideally suited to serve as an alternative to China to meet global needs.
Passive investing in India has been gaining momentum, either through index funds or exchange-traded funds. It is a low friction investment strategy tracking a specific index as closely as possible.
Investors should note that Axis Healthcare ETF is an equity fund, and it carries high risk. They should allocate to these funds based on their risk profile and asset allocation.