Money9 Covid25 Index & Nifty 50 hovering near their record highs

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Covid-19 caseload is witnessing a continuous fall with daily cases falling and various state governments looking to lift the restrictions. This in turn has been fuelling the ongoing rally in stock exchanges with Nifty hitting a new lifetime high of 15,733 on June 4.

Similarly, on Dalal Street shares of pathology labs, oxygen producers, pharmaceutical firms and medical equipment are on everybody’s radar due to an unparallel rise in the demand for the products and services of these companies .

Citing this, we at Money9 instituted 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

This week, Nifty50 index rallied 1.72% compared to a 1.2% jump in the Nifty Pharma index and a 1.1% surge in Money9 Covid25 Index. 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 113%  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 purpose only. Before investing, please consult your financial advisor)