Mirae Asset Global Investments (India) Pvt Ltd has launched New Fund Offer (NFO) – Mirae Asset Healthcare Fund, an open-ended thematic fund predominantly investing in equities and equity related securities of companies benefitting either directly or indirectly in Healthcare and allied sectors in India.
Being a thematic fund the portfolio construction will be focused. Hence, atleast 80% of its net asset allocation will be inclined towards the healthcare/allied sectors and other related sub-sectors and businesses, such as chemicals (bulk, specialty, agrochemicals), medical equipment, insurance, wellness, diagnostics and allied services and health IT services. “The universe of stocks will comprise majorly of companies having robust business models, enjoying sustainable competitive advantages as compared to their competitors and have high return ratios,” the Mirae offer document said.
The scheme can invest up to 50 per cent of net assets in equity derivative instruments for the purpose of trading, hedging and portfolio rebalancing.
Catalyzing Healthcare Industry
- Hospitals: India’s hospital bed to population ratio is one of lowest in the world (0.7 beds for 1,000 people vs global average of 30). To meet the global median, India needs investments of over Rs 10 lakh crore.
In view of increasing demand for quality healthcare, private hospital market is expected to grow significantly
- Diagnostics: 85% of industry is currently unorganized, which may see a significant shift to organized sector in the next decade. Market share of organized diagnostic chains may jump to ~23% by FY 26 from ~15% currently
- Pharmaceuticals: Rising income levels, ageing population, growing health awareness and changing attitude towards preventive healthcare is expected to boost healthcare services demand in future
Leading pharma producers – India pharmaceutical sector is estimated to account for 3.1% – 3.6% of the global pharmaceutical industry in value terms and 10% in volume terms. It is expected to be US$ 100 billion by 2025
- One of the highest exports – India is the largest exporter formulation with 14% market share and ranks 12th in the world in the term of export value. Double digit growth is expected over the next 5 year.
- Amongst largest labor force in India – India’s pharmaceutical production is expected to expand at 12.89% CAGR over 2015-20 to reach over Rs.3.5 lakh crore. India is the second largest contributor of global biotech and pharmaceutical workforce.
- Potential Opportunity – Between 2011 and 2016, patent drugs worth USD 255 Billion are estimated to go off patent leading to a huge surge in generic products. Rise in R&D costs and patent expiries; provide opportunity for low cost outsourcing to India.
India is expected to rank amongst the top three healthcare markets in terms of incremental growth by 2020
- Medical Insurance: As of 2016, less than 15% of the Indian population is covered by health insurance. State sponsored health insurance scheme announced in budget union 2018 to cover 10 crore families will increase penetration level of the industry. Private insurance coverage to increase nearly 15% p.a by 2020
- Atleast 80% investments in Pharma, Healthcare and allied sector
- Fundamental, bottom-up approach that aims to identify growth companies with high return ratios (ROE) and sustainable competitive advantage
- Flexibility to invest across market capitalization and style in selecting investment opportunities within this theme.
- Endeavour to maintain a concentrated portfolio of 30 – 40 stocks
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.
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