Home / Mutual Funds / News /  Motilal Oswal S&P BSE Healthcare ETF NFO is open for subscription

Motilal Oswal Mutual Fund’s Motilal Oswal S&P BSE Healthcare ETF is now open for subscription. It is an open-ended scheme tracking the S&P BSE Healthcare Total Return Index. The NFO opened on 14 July and closed 22 July 2022.

The S&P BSE Healthcare Total Return Index is designed to provide investors exposure to companies included in the S&P BSE All Cap that are classified as members of the healthcare sector, a company release said. The index is reconstituted annually in September. 

At present, the index comprises 97 constituents spanning pharmaceuticals, hospitals, diagnostic, medical equipment etc. This covers more than 99% of the listed healthcare universe in terms of market capitalization. As of June 2022, the index constitutes Sun Pharmaceuticals Industries Ltd, Dr. Reddy’s Laboratories Ltd, Cipla Ltd., Divis laboratories Ltd. and Apollo Hospitals Enterprise Ltd. The top 10 stocks account for close to 62% of weight in the index. In terms of industry breakup – pharmaceutical is the largest with its weight close to 81% followed by hospitals (14%) and healthcare services (3%) forming into the top 3. The index offers healthy exposure to mid and small-size healthcare companies with the majority weight going to large-cap companies.

“At Motilal Oswal AMC, we target to provide options of passive funds across key segments. The healthcare industry has grown 14x in the past 14 years and may continue growing rapidly on the back of increased insurance adoption, medical tourism, and rising incomes. The pandemic has reinforced the importance of healthcare facilities in India. Government’s plan to ramp up spending and provide healthcare facilities to the economically weaker section will also boost the domestic healthcare sector," said Navin Agarwal, MD & CEO, Motilal Oswal Asset Management Company Ltd.

Historically healthcare as a sector is considered as a defensive play, and it has experienced lower drawdowns, said Pratik Oswal, head of passive funds, Motilal Oswal Asset Management Company. Unlike cyclical sectors, demand for healthcare is resilient and less impacted by economic swings. “By covering 99% of the healthcare universe, the Motilal Oswal S&P BSE Healthcare ETF offers the broadest exposure among its peer at lower expense ratio," he added.

During NFO, investors can invest minimum 500 and in multiples of 1 thereafter. After NFO, investors can buy/sell units of the scheme in a round lot of 1 unit and in multiples thereafter on the exchange or they can approach Motilal Oswal Mutual fund for subscription/redemption in excess of 25 crores.

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