Money9 Covid25 Index outperforms Nifty 50, Nifty Pharma as vaccination drive gathers pace

A couple of months ago, India was on the centre stage of global news for reporting the highest number of Covid cases and the collapse of healthcare infrastructure. India is again in the headlines but this time for all the good reason. According to CoWIN dashboard data on Day one (June 21, 2021) of the Centre’s free vaccination programme for all, India administered close to 9.1 million total doses, the most in a single day. In the past two weeks, the average is 4.7 million doses per day, a level last hit in early March.

Dalal Street gave a thumbs up to the ramp-up in vaccination drive as benchmark equity indices ended the week with over 1.1% gains. Ever since the outbreak of Covid 19 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 the lockdown was announced in India, and the base value of the index has been kept at 100.

Performance

With the Central government’s mass vaccination drive becoming a reality Money9 Covid25 Index outperformed both Nifty 50 and Nifty Pharma indices this week that too with a big margin. The Money9 Covid25 Index ended the week with gains of 2.37% at 318.89 compared to a rise of 1.13% rise in Nifty 50 which settled at 15,860.35. On the other hand, the Nifty Pharma index was up just 0.28% to 14,069.60.

Even, in the long run, that is since the outbreak of Covid-19 from March 24, 2020, the day India went into lockdown Money9 Covid25 Index has surpassed both Nifty 50 as well as Nifty Pharma indices with a jaw-dropping margin. Money9 Covid25 Index delivered a whopping 218.89% returns versus 112.82% 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 purposes only. Before investing, please consult your financial advisor)