India’s healthcare sector has been experiencing significant growth in recent years, driven by factors such as a growing and ageing population, increasing disposable incomes, and a greater emphasis on preventive and curative care. This presents an attractive opportunity for investors looking to capitalise on the sector’s potential. One way for investors to gain exposure to the healthcare industry is through Exchange-Traded Funds (ETFs).
Healthcare ETFs offer a diversified and cost-effective way to invest in a basket of healthcare-related stocks, rather than trying to pick individual winners. This article explores some of the best healthcare ETFs available to investors.
ICICI Prudential Nifty Healthcare ETF
The ICICI Prudential Nifty Healthcare ETF is a passively managed ETF that tracks the Nifty Healthcare Index. It provides investors with exposure to a diverse range of healthcare companies, from pharmaceutical giants to hospital operators. The fund has a relatively low expense ratio of 0.15%. Some of the top holdings in the fund include Sun Pharmaceutical Industries, Dr. Reddy’s Laboratories, and Apollo Hospitals Enterprise.
Nippon India Nifty Pharma ETF
The Nippon India Nifty Pharma ETF is one of the largest and most well-established healthcare ETFs in India. It tracks the Nifty Pharma Index, which includes a diversified mix of companies across the healthcare value chain, including pharmaceuticals, hospitals, and diagnostic services.
Motilal Oswal BSE Healthcare ETF
The Motilal Oswal BSE Healthcare ETF is another popular healthcare-focused ETF in India. It tracks the BSE Healthcare Total Return Index and has an expense ratio of 0.22%. It provides investors with exposure to a diverse range of healthcare companies, with some of the top holdings in the fund being Sun Pharmaceutical Industries, Cipla, and Dr. Reddy’s Laboratories.
Mirae Asset Healthcare Fund
The Mirae Asset Healthcare Fund is a newer addition to the Indian healthcare ETF market. It tracks the BSE Healthcare Index, providing investors with exposure to the broader healthcare sector. It holds stocks across sectors like hospitals, speciality chemicals, medical equipment, and diagnostics.
Factors to consider when choosing a healthcare ETF in India
Diversification: Look for ETFs that provide exposure to a wide range of healthcare companies, across different sub-sectors and market capitalisations.
Expense ratio: Choose ETFs with low expense ratios, as this can have a significant impact on your long-term returns.
Performance: Consider the historical performance of the ETF, as well as its risk-adjusted returns.
Sector exposure: Depending on your investment goals, you may want to focus on specific healthcare sub-sectors, such as pharmaceuticals, medical devices, or hospital services.
Fund size and liquidity: Look for ETFs with a large asset base and high trading volume, as this can help ensure that you can buy and sell units easily.
Conclusion
The healthcare sector in India presents an attractive investment opportunity for investors looking to capitalise on the industry’s growth potential. Healthcare ETFs offer a convenient and diversified way to gain exposure to this sector.
When choosing a healthcare ETF, it’s important to consider factors such as diversification, expense ratio, performance, sector exposure, fund size, and liquidity. By doing your research and selecting the right ETF, you can potentially benefit from the growth of the Indian healthcare industry.