Money9 Covid25 Index continues to outperform Nifty50, Nifty Pharma

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Indices were on a record-breaking spree for another week as investor sentiments remained buoyant with a further decline in Covid-19 cases, faster roll-out of and hopes of a quick economic revival on easing of lockdown restrictions. Key barometer index Nifty 50 ended the week with gains of 129 points or 0.82% to settle at 15,799 after hitting a new peak of 15,824 on June 11, 2021.

Prime Minister Narendra Modi earlier in the week announced that the central government will procure 75% of vaccines and distribute it to states while earmarking 25% of production for private hospitals. In a clear effort to address the profiteering tendency of many hospitals, PM Modi also said that they can take a service charge of Rs 150 on each vaccine. This kept hospital stocks buzzing on Dalal Street. Similarly, shares of 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.

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

This week, Money9 Covid25 Index continued its outperformance as it ended at record highs of 320.55 advancing 2.78% compared to Nifty 50 gains of 0.82% while the Nifty Pharma index climbed 2.57%. Just like the Money9 Covid25 Index even the Nifty 50 & Nifty Pharma indices ended at fresh highs of 15,799 and 14,464 respectively.

Even 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 221% returns versus 119% garnered by the Nifty Pharma index and 103% 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)