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Key benchmark indices ended with small losses to snap four weeks of gains on profit booking. The Nifty, after scaling record highs of 15,901 during the week ended with a marginal loss of 0.73% on weekly basis led by the US Fed’s indication that it would raise interest rates sooner than expected weighed on the markets.
On the economic front, the situation looks a bit grim, but on the Covid-19 front things are improving with India reporting 60,753 new Covid cases in a day. The active case tally stood at 7,60,019, the lowest in 74 days, according to Union Health Ministry data updated on June 19. The daily positivity rate was recorded at 2.98%. It has been less than 5% for 12 consecutive days. Even the weekly positivity rate has declined to 3.58%. Simultaneously recoveries continue to outnumber daily new cases for the 37th consecutive day.
At the same time 27.23 crore Covid-19 vaccine doses have been administered so far under the nationwide vaccination drive. With so much happing on the health front stocks of hospitals, pathology labs, oxygen producers, pharmaceutical firms and medical equipment are on everybody’s radar due to a massive rise in the demand for the products and services of these companies.
Citing this, Money9 devised and launched the Money9 Covid25 Index with an intention to help the investor get a holistic view of companies that are at the forefront of India’s fight against the virus.
As the name suggests, the index consists of 25 Covid-stocks broadly categorised into five verticals of the healthcare industry — vaccine manufacturers, pharma companies, hospital chains, pathology laboratories and medical equipment manufacturers.
Methodology
Money9 Covid25 Index is computed based on equal weightage for all constituents of the index. In this method, the level of the index demonstrates the aggregate market value of stocks present in the index in a specific base period. The base period for the Money9 Covid25 Index is March 24, 2020, when India went into lockdown, and the base value of the index has been kept at 100.
Performance
Money9 Covid25 Index performance in comparison with Nifty 50 and Nifty Pharma
This week, Money9 Covid25 Index delivered negative returns but outperformed the Nifty Pharma index. The Money9 Covid25 Index ended at 311.52 declining 2.82% compared to a 3% fall in Nifty Pharma which settled at 14,030.60. On the other hand, Nifty 50 slipped just 0.73% to 15,683.35.
However, in the long run since the outbreak of Covid-19 that is from March 24, 2020, the day India went into lockdown Money9 Covid25 Index has outperformed both Nifty 50 as well as Nifty Pharma indices with a big margin. Money9 Covid25 Index delivered a whopping 212% returns versus 112% garnered by the Nifty Pharma index and 101% by the Nifty50 index.
Constituents
The index is constructed as a Covid-specific alternative to the Nifty Pharma index by including a larger universe of stocks that include hospitals, pathology labs, medical equipment manufacturers and oxygen suppliers. Companies are selected based on their product offering and their being at the forefront of aiding the fight against the virus.
Limitations
Companies having different products, revenue streams and sizes are given equal weightage. The biggest vaccine players — Serum Institute of India and Bharat Biotech — are not part of the index since they are not listed on exchanges.
(Disclaimer: The list has been compiled for informational purposes only. Before investing, please consult your financial advisor)