ICICI Prudential Healthcare ETF NFO opens May 06 – Check whom it suits

Sun Pharmaceutical Industries, Dr Reddy’s Laboratories, Divi’s Laboratories, Cipla and Apollo Hospitals Enterprise form the top five names of the Nifty Healthcare Index.

ICICI Prudential Mutual Fund has announced the launch of Healthcare ETF for investors looking to invest in the healthcare sector. The New Fund Offer (NFO) of ICICI Prudential Healthcare ETF opens on May 06, 2021, and closes on May 14, 2021. The Scheme is an open-ended Exchange Traded Fund (ETF) tracking Nifty Healthcare Index and provides exposure to leading companies forming part of the healthcare sector. The fund is suitable for investors looking to gain exposure from the overall healthcare segment. The minimum investment during NFO required is Rs. 1,000.

The scheme aims to provide returns that closely correspond to the returns provided by its benchmark Nifty Healthcare TRI Index in the same proportions, subject to tracking errors. The fund will be listed on NSE and BSE and will the units will be available for buy, sell during the trading hours.

Speaking on the launch of the product, Nimesh Shah, MD & CEO, ICICI Prudential AMC said, “ICICI Prudential Healthcare ETF provides exposure to a basket of securities in the healthcare sector. Given the rising health problems, lifestyle choices and outbreak of epidemics, the healthcare sector has a strong potential to grow steadily in the coming decade. Also, the need for better healthcare facilities will always be a constant need considering the large population of India. Therefore this sector provides a good scope of investment.”

The Nifty Healthcare Index comprises of 20 fast-growing Indian Healthcare companies. In terms of index constituents, Sun Pharmaceutical Industries, Dr Reddy’s Laboratories, Divi’s Laboratories, Cipla and Apollo Hospitals Enterprise form the top five names of the index. This index has outperformed the Nifty 50 index in 6 out of the last 10 calendar years.

Considering the growth drivers of the healthcare sector, amidst the Covid-19 pandemic, Healthcare funds provide investors with an opportunity to benefit from this growing segment in a cost-effective manner through ETFs. Exposure to specific sectors needs to be as per one’s risk profile and also requires one to keep reviewing its performance regularly. The risk-reward of a sectoral fund is higher than a plain-vanilla diversified equity fund.