Returns from healthcare ETFs can be highly cyclical, say analysts

Avoid over 5% exposure and have 5-7 years of investment horizon

Two mutual fund houses — ICICI Prudential and Axis — have launched healthcare exchange-traded funds (ETFs) in recent days. Both will track the Nifty Healthcare index.

Sound prospects

India’s healthcare sector has sound long-term growth prospects. Healthcare infrastructure is likely to be ramped up in the wake of the pandemic. A big driver will be the Ayushman Bharat initiative, which aims to provide healthcare facilities to over 50 crore citizens. “By 2024, over $200 billion (about Rs 1.47 trillion) is likely to be spent on medical infrastructure to address this requirement,” says Chintan Haria, head-products and strategy, ICICI Prudential Asset Management Company