ICICI Prudential AMC has launched an open-ended equity mutual fund which will invest across the spectrum of healthcare and related sub-sectors, including diagnostics companies as well. ICICI Prudential Pharma Healthcare and Diagnostics (PHD) Fund is an open-ended scheme. The fund’s NFO (new fund offer) will open on June 25 and will close on July 9. The minimum application amount for subscription is Rs 5,000 and the benchmark index for the scheme is S&P BSE Healthcare Index.

“What is different about this scheme is that very clearly we are not only talking about pharmaceutical here, but we are also talking about healthcare and diagnostics as a space,” said Yogesh Bhatt, Senior Vice President, Investments, ICICI Prudential Mutual Fund, at the launch event.

According to the scheme information document, the investment objective of the ICICI Prudential PHD fund is to generate long-term capital appreciation by creating a portfolio that is invested in equity and equity-related securities of pharma, healthcare, hospitals, diagnostics, wellness and allied companies. The scheme, however, does not guarantee or assure any returns.

Bullish on returns: Here’s why

Yogesh Bhatt said that he is quite bullish on the returns of the new scheme. “This particular theme had been underperforming the markets for the last two years. Last calendar year nifty index was up 28%, (but) this index (healthcare) was down 6%. In 2016, the index was down 14%,” Yogesh Bhatt said while talking to FE Online.

“It is something which is very attractive — where the valuations have also corrected, the growth expectations are lower and hence there is kind of an ignorance or under ownership is there as far as this sector is concerned,” Yogesh Bhatt added.

Bhatt said that with the overall market under a little correction mode and with high volatility because of various global reasons as well, there is an opportunity in the healthcare sector. “We feel that the thematic scheme in terms of the pharmaceutical sector — which is also a kind of defensive strategy — is ideally suited for investors at this point in time with a horizon of 3-5 years. We expect this particular theme to beat the broad market. To what extent, we will see in three years. I can’t give a percentage right now, but I feel that this particular theme will lead the broad market which is Nifty,” he said.