Edited excerpts from a chat:
How does the Groww BSE Hospitals ETF differentiate itself from existing healthcare or pharma-focused passive products, and what specific gap in investor portfolios are you aiming to address through a pure-play hospitals strategy?
Today, pharma-focused passive funds are heavy on the listed pharmaceutical companies, as they should be; even the healthcare-focused products in India are only able to provide exposure to a broad mix of healthcare companies, including pharma, hospitals, and others. The Groww BSE Hospitals ETF, in contrast, offers targeted exposure to the hospitals segment, which accounts for nearly three-fourths of India’s healthcare industry. An important point to note is that pharma companies often have substantial global exposure and can be influenced by external factors, while hospitals are largely domestic businesses and therefore more closely aligned with India’s structural healthcare demand trends.
By focusing on hospital service providers, this ETF seeks to address a portfolio gap for investors looking for a pure-play opportunity in healthcare delivery, one of the fastest-growing and rapidly transforming segments in the healthcare ecosystem.
Given that hospitals account for nearly three-fourths of India’s healthcare market and are seeing improving financial metrics, what gives you confidence that this structural growth story can sustain over the next market cycle?
While healthcare as a whole benefits from structural tailwinds, the hospital segment has distinct drivers that reinforce its long-term growth trajectory. Rising health insurance penetration, increasing affordability, higher incidence of lifestyle diseases, medical tourism, and a gradually ageing population are all expanding the market for organised hospital players.At the same time, the sector is witnessing sustained capacity expansion through rising capex, alongside improving occupancy levels and operating efficiencies. Given the long gestation periods and high entry barriers, established players are well-positioned to benefit from this incremental demand. India today has relatively low beds-per-capita and doctor density levels compared to global counterparts, which indicate significant headroom for potential expansion in the coming years.
With gold and silver seeing renewed investor interest amid global uncertainties, are you noticing a meaningful shift in retail asset allocation away from equities, or is this more of a tactical diversification trend?
Indians have traditionally allocated to precious metals, so the recent rise in flows to gold and silver ETFs should not be viewed as a shift away from equities. Rather, it reflects the ongoing financialisation of savings, where exposure that may earlier have been taken through physical gold or silver is now moving into regulated financial instruments.We view this as a structural evolution in how allocations are expressed, rather than a short-term tactical shift driven purely by market uncertainty.
January saw gold ETFs getting more inflows than total equity inflows. Is this a sign of euphoria building in the market for bullion?
It’s not unusual to see flows into an asset class pick up during periods of strong performance. However, describing this as euphoria may be overstating the case. While some portion of flows could be momentum-driven, gold ETF inflows were rising even before the recent rally.
The category’s AUM has grown over 13 times between March 2019 and March 2025, indicating that the trend is structural and long-term in nature, rather than purely sentiment-driven.
How should investors think about allocating between equities and precious metals at this juncture, especially given elevated valuations in certain equity pockets and strong momentum in gold and silver?
We believe that asset allocation decisions should be guided by long-term strategic frameworks rather than short-term valuation or momentum signals, and that both equities and precious metals should be a part of a diversified portfolio. Equities remain central to wealth creation over time, while precious metals can provide diversification benefits, particularly during periods of uncertainty.
While equities typically form a larger allocation given their link to long-term economic growth, the exact mix should reflect an investor’s risk tolerance, time horizon and financial goals.
For someone investing in a gold ETF, for example, how should one decide which is the best product to buy? Many investors look at returns and expense ratios. What are the parameters one should look at before selecting an ETF from a particular fund house?
While returns and expense ratios are important, investors should also closely evaluate tracking error, which reflects how efficiently the ETF mirrors underlying gold prices. Lower tracking error indicates better replication, while higher tracking error may imply greater deviation from the underlying gold prices, leading to inconsistent performance relative to the commodity it seeks to track.
In addition, liquidity, in the form of trading volumes and bid–ask spreads, is also a parameter to consider before selecting an ETF.
Many investors also get confused between gold ETFs and gold mutual funds. For someone who already has a demat account and is looking to invest for the long term, does it make more sense to buy an ETF rather than an MF?
Both Gold ETFs and Gold Mutual Funds serve a similar purpose, providing exposure to gold in a regulated, financial format and over the long run, the difference in returns is likely to be marginal. The choice need not materially alter long-term outcomes.
The key distinction lies in structure and convenience: Gold ETFs require a demat account and are traded on the exchange like stocks, while Gold Mutual Funds can be bought and redeemed directly with the AMC without a demat, offering greater ease of access for certain investors.
