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Published on: Oct. 26, 2020, 9:35 a.m.
Edelweiss’ new fund is ready to take off
  • Gupta: building strong alliances

By Lancelot Joseph. Executive Editor, Business India

In the first week of October 2020, Edelweiss Asset Management Ltd (EAML) announced a partnership with MSCI Inc, a leading provider of critical decision support tools and services for the global investment community, to launch Edelweiss MSCI India Domestic & World Healthcare 45 Index Fund. This launch marks MSCI’s foray into the Indian market. The NFO will be open from 6 October 2020 to 20 October 2020. 

First in a series of collaborations between Edelweiss and MSCI, the thematic passive index fund is designed to provide Indian investors undiluted access to invest in top healthcare companies from India and around the world. “We are pleased to partner with MSCI, a global leader in indices, which has a proven track record of strong governance and robust processes,” says Radhika Gupta, MD & CEO, EAML. “This partnership with MSCI is consistent with Edelweiss AMC’s legacy of building strong and sustainable alliances, much like the one with JP Morgan in 2016 and, more recently, with the government of India on the Bharat Bond ETF, India’s first corporate bond, launched in 2019”. EAML is a part of the investment & advisory business of Edelweiss Group and remains one of the fastest growing and youngest AMCs in India, with an AUM of Rs40,400 crore as on 31 August 2020. 

Poised for growth

“We believe that this fund will provide investors with an easy, low-cost and undiluted access to promising healthcare companies in India and around the world,” says Gupta. “Given the rise in lifestyle diseases and the uptick in spending to treat them, the healthcare sector is primed to grow steadily over the next decade,” adds she.

“We will support EAML in its drive to deliver cutting-edge investment products to the Indian domestic market, to meet the evolving needs of investors,” announces Jack Lin, MD & head, APAC Client Coverage, MSCI. “The collaboration with EAML is a testament to MSCI’s commitment to provide the emerging and fast-growing domestic investor base in India with world-leading solutions to understand investment opportunities and risk better, enabling them to build more effective and sustainable portfolios.”

Benefiting from growth drivers like growing demand, export opportunities and a favourable policy environment, this fund will be a combination of innovation and growth, with exposure to some of the world’s largest healthcare companies listed in the US and India. The fund has a weightage of 70 per cent on Indian healthcare, comprising top 25 stocks based on full market cap.

The remaining 30 per cent weightage will be on 20 stocks listed in the US, which comprise top five stocks, based on full market cap from four sub-industries each – pharmaceuticals, healthcare equipment, biotechnology and life science tools & services. A few of the top holdings of the underlying fund include Apollo Hospitals, Cipla, Dr Reddy’s Laboratories, Jubilant Life Science, Biocon, and Pfizer.

The initial investment in the fund will be Rs5,000 per application, with multiples of Rs1 subsequently, with no exit load. The fund will be benchmarked against the MSCI India Domestic & World Healthcare 45 Index and managed by Hardik Varma for domestic investments and Mayur Dharmshi for overseas investments.

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