Motilal Oswal Mutual Fund is launching the Nifty MidSmall Healthcare Index Fund, an open-ended scheme tracking the Nifty MidSmall Healthcare Total Return Index. This New Fund Offer (NFO) opens on October 29, 2024, providing investors an opportunity to tap into India’s growing mid and small-cap healthcare segment.
The fund focuses on replicating the performance of mid and small-cap stocks in the healthcare sector, capturing the growth potential driven by rising domestic healthcare demand, government initiatives, and innovation in specialized therapies.
Key Features
- NFO Period: Opens on October 29, 2024
- Fund Managers: Mr. Swapnil Mayekar (Equity) and Mr. Rakesh Shetty (Debt)
- Benchmark: Nifty MidSmall Healthcare Total Return Index
- Minimum Investment: ₹500 initially, with ₹1 increments thereafter
- Load Structure: 1% exit load if redeemed within 15 days; no load thereafter
- Sectoral Allocation: 100% in healthcare, providing concentrated exposure
Investment Strategy
The fund passively tracks the Nifty MidSmall Healthcare Total Return Index, allowing investors to benefit from systematic exposure to healthcare innovations and growth within mid and small-cap segments. The focus includes areas such as R&D, niche therapeutics, and emerging healthcare technologies.
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Portfolio Highlights
The top ten holdings feature leaders in the healthcare sector, led by Max Healthcare Institute Ltd. (13.2%), Lupin Ltd. (9.5%), and Aurobindo Pharma Ltd. (7.4%), followed by Fortis Healthcare Ltd., Alkem Laboratories Ltd., Glenmark Pharmaceuticals Ltd., Mankind Pharma Ltd., Ipca Laboratories Ltd., Laurus Labs Ltd., and Biocon Ltd. This diverse portfolio captures companies specializing in pharmaceuticals, healthcare services, and biotechnology.
Historical Performance
The Nifty MidSmall Healthcare Index has shown impressive returns, particularly over 1 year (57.5%) with low volatility (13.8%), indicating recent sector momentum. Over longer periods, returns remain strong—29.7% over 5 years and 24.5% over 15 years—with moderate volatility around 16%, highlighting consistent growth potential in the healthcare sector with manageable risk.
These returns highlight the growth potential within the healthcare sector, especially as demand continues to rise domestically and innovations drive market expansion.
Benefits
- Sector-Specific Growth: Focused exposure to mid-small cap healthcare stocks allows investors to capitalize on sectoral trends.
- Potential for High Returns: Strong historical performance indicates robust growth potential, especially in niche healthcare areas.
- Low Cost and Transparency: As a passively managed index fund, this offers a transparent and cost-effective investment option.
Risks
The fund’s sector-specific concentration means it may experience volatility, especially during periods of regulatory changes or market downturns affecting healthcare. It is suitable for investors with a high-risk tolerance and a long-term horizon.
Conclusion
The Motilal Oswal Nifty MidSmall Healthcare Index Fund offers a unique opportunity for those looking to invest in India’s burgeoning healthcare sector through a diversified, mid-small cap portfolio. Ideal for long-term investors seeking exposure to healthcare growth, this fund provides a balanced yet high-potential avenue for capturing industry innovations and rising demand. Consult a financial advisor to assess if this aligns with your risk profile and investment goals.
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