Pharma Mutual Funds: 5 Best Healthcare Funds in India [2018]

By | December 4, 2018

Are you planning to invest in healthcare sectors via mutual funds? If it is so, then you can start investing in sectorial funds especially healthcare and pharma mutual funds.

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Sector-specific funds are those that make investments in certain industries. Healthcare and Pharma mutual funds make investments in the stocks of a variety of pharmaceutical companies.

Medicines and other pharma-related requirements have been rising at a considerable rate because of the massive population in India. Due to this, pharmaceutical companies in the country have been recording impressive profits.





On a global scale, in terms of sheer volume, India stands third as far as the pharmaceutical market is concerned. So, you can expect further growth to the tune of $55 billion at a Compound Annual Growth Rate (CAGR) of 15.92% in near future.

Furthermore, by 2025, this growth is expected to accelerate to $100 billion. Some of the big names in the sector include Cipla, Glenmark Pharma, Sun Pharma, etc.

The estimated growth for the pharma sector in India looks promising, to say the least. If you wish to make the most of the growth in the pharmaceutical sector, then investing in pharma mutual funds is highly recommended.

Here are the top five pharma mutual funds you can consider.

Reliance Pharma Fund

Date of Launch: June 5, 2004

Net Assets: Rs.2,752 crore (as on October 31, 2018)

Net Asset Value as on November 20, 2018: Rs.151.682

Category: Equity – Sectoral

Asset Management Company: Reliance Nippon Life Asset Management Ltd.

Risk Profile: High

Minimum Investment Amount: Rs.5,000

Exit Load: 1% of the applicable NAV for redemptions within a year and no fee thereafter.

Reliance Pharma Fund aims at generating consistent returns. It invests in fixed income securities or equities of pharmaceutical and healthcare companies. Sailesh Raj Bhan and Kinjal Desai manage this fund.

99.32% of the corpus of the fund is invested in equities. Only 0.41% is invested in cash, and the remaining 0.27% is invested in other instruments.

Some of the major holdings of the scheme include Divi’s Lab, Dr. Reddy’s, Aurobindo Pharma Ltd, Sun Pharma, and Cipla among others.



Tata India Pharma and Healthcare Mutual Funds

Date of Launch: December 28, 2015

Net Assets: Rs.185 crore (as on October 31, 2018)

Net Asset Value as on November 20, 2018: Rs.8.8219

Category: Equity – Sectoral

Asset Management Company: Tata Asset Management Limited

Risk Profile: High

Minimum Investment Amount: Rs.5,000

Exit Load: 0.25% of the applicable NAV for redemptions within three months; nil thereafter

Tata India Pharma & Healthcare Fund aims at generating long-term capital growth for you. Investment done by this fund is mainly in equities of healthcare and pharma companies. The fund is managed by Sailesh Jain and Meeta Shetty.

94.52% of the corpus of the scheme is invested in equities while 5.77% is invested in cash instruments. Some of the top portfolio holdings of the scheme include Sun Pharma, Ipca Lab, Dr. Reddy’s, Syngene International and Cipla.

UTI Healthcare Fund

Date of Launch: June 28, 1999

Net Assets: Rs.441 crore (as on October 31, 2018)

Net Asset Value as on November 20, 2018: Rs.84.2053

Category: Equity – Sectoral

Asset Management Company: UTI Asset Management Company Ltd.

Risk Profile: High

Minimum Investment Amount: Rs.5,000

Exit Load: 1% of the applicable NAV for redemptions within a year; nil thereafter

Previously known as the UTI Pharma & Healthcare Fund. UTI Healthcare Fund aims to generate capital appreciation by investing in equities of healthcare and pharma companies.

The scheme is managed by V Srivatsa, and 96.88% of its corpus is invested in equities. Remaining 3.12% is invested in cash instruments.

Some of the top holdings of the fund include Sun Pharma, Cipla Ltd, Dr. Reddy’s, Cadila Healthcare, Ipca Lab.



SBI Healthcare Opportunities Fund

Date of Launch: December 31, 2004

Net Assets: Rs.1,076 crore (as on October 31, 2018)

Net Asset Value as on November 22, 2018: Rs.121.303

Category: Equity – Sectoral

Asset Management Company: SBI Funds Management Private Limited

Risk Profile: High

Minimum Investment Amount: Rs.5,000

Exit Load: 0.5% of the applicable NAV for redemptions within 15 days; nil thereafter

It was previously known as the SBI Pharma Fund. SBI Healthcare Opportunities Fund aims at offering you a maximum growth opportunity via investment in equities. The fund invests in growth-oriented stocks.

1-year returns of the fund are recorded at -4.8%, the 3-year returns stand at -5.9%, and the 5-year returns are recorded at 11%.

SBI Healthcare Opportunities Fund has been managed by Tanmaya Desai since June 1, 2011. Almost 95.64% of its corpus invested in equity instruments, while the remaining 4.36% is invested in cash instruments.

It holds Aurobindo Pharma, Sun Pharmaceuticals, Dr. Reddy’s Lab, Strides Pharma Science, Divi’s Lab, Cipla, etc.

Mirae Asset Healthcare Fund

Date of Launch: June 25, 2018

Net Assets: Rs.192.77 crore (as on September 30, 2018)

Net Asset Value as on November 22, 2018: Rs.10.446

Category: Equity – Sectoral

Asset Management Company: Mirae Asset Global Investments (India) Pvt. Ltd.

Risk Profile: High

Minimum Investment Amount: Rs.5,000

Exit Load: 1% of the applicable NAV for redemptions within 12 months; nil thereafter

Mirae Asset Healthcare Fund invests in equity and equity-related instruments of companies. Moreover, you can expect a huge growth in the healthcare and allied sectors in India.

The scheme invests 92.71% of its corpus in equities, while 6.55% is invested in cash. Vrijesh Kasera manages this fund, and it has some top companies in the holdings. It includes Sun Pharmaceuticals, Cipla, Aurobindo Pharma, Dr. Reddy’s Laboratories, Torrent Pharma, etc.

Each of the aforementioned schemes is forecast to grow considerably in the future. If you wish to enter the mutual funds market, then this pharma mutual funds will be a good choice. So, investing in these schemes will give you an opportunity to create wealth for the long term.

Having said that, make sure you consult a financial expert before you step in. You need to better understand the growth rate of the pharma sector in India before investing.

What you need to know about India’s Healthcare Sector

Public healthcare can be availed for free of cost by individuals who fall below the poverty line. While most of the middle-class and upper-class people in the country tend to use private healthcare.

The low-income groups in the country usually avail healthcare services from public sector institutions. Furthermore, public healthcare services are also reported to be used more by the elderly, and women.

The year 2005 marked the beginning of a new era so far as the healthcare sector in India is concerned. Since then, the private sector has seen the addition of the majority of India’s healthcare capacity.

In some cases, health care centers and hospitals in the private sector have partnered with the private sector. 58% of the hospitals in India belong to the private sector, along with 81% of the country’s doctors, and 29% of beds.

Where is the Healthcare Sector in India Headed?

Majority of the fund managers who ply their trade with renowned mutual fund houses are of the belief that the Indian healthcare sector has a lot of potentials. Despite recording exponential growth in recent years, the sector is tipped to grow further in the future.

India’s economic growth has increased the disposable income of individuals in the country. Moreover, the emphasis on rural health programmes in addition to enhancements in the healthcare infrastructure has aided the development of the sector.

Popular Healthcare Mutual Funds

Here are the number of funds with exposure to the corresponding stock:

Name of the Stock June 2018 December 2017 June 2017 December 2016
Cipla 122 170 127 199
Sun Pharmaceuticals 213 308 218 327
Lupin 90 144 110 191
Cadila Healthcare 61 75 43 66
Aurobindo Pharma 109 211 115 187
Divi’s Laboratories 71 90 54 134
Dr. Reddy’s Laboratories 107 149 77 109
Torrent Pharmaceuticals 38 60 48 92
Sanofi India 44 46 47 61
Ipca Laboratories 46 49 34 62

Other Investment Ideas:

Top 10 High Dividend Paying Stocks In India To Invest

5 Top Pharma Stocks To Invest in India [2018]

How Investments Can Keep You Out Of Trouble

Investing in Pharma Mutual Funds Through Systematic Investment Plans

Systematic Investment Plans (SIPs) enable you to invest a fixed amount at regular intervals of time.

If you don’t have a lump sum amount to invest a large amount of money in one go, a SIP can be a great alternative. You can choose an amount that will be deducted at regular intervals of time from your savings account.

Benefits of Investing in Pharma Mutual Funds Through SIPs

Some of the benefits of investing in healthcare or pharma mutual funds through SIPs are as follows:

Power of Compounding

SIPs can help you make the most of the power of compounding. It suggests that lower amounts that are invested over a long tenure generally accrue greater returns in comparison with lump sum investments.

Low Initial Investment Amount

Taking the SIP route to make investments in mutual funds can work out especially well if you have a low budget. Above all, most plans allow you to start with amounts as low as Rs.500.

Even if you are a student or someone who has started working only recently. So, you can set aside Rs.500 to invest in mutual funds and enjoy attractive returns in the long term.

Rupee Cost Averaging

Considering the volatility of equity markets, investing in mutual funds through SIPs is safe. Therefore, it means that you are purchasing a higher number of units when the market is in a slump.

Similarly, you will be purchasing a lower number of units when the market is blooming, which would, therefore, lower the cost per unit.

Discipline in Investing

Investing in mutual funds through SIPs would increase your level of discipline with regard to your finances.

Payments are automated and deducted from your saving account at regular intervals of time. So, you need to ensure that there is sufficient balance in your savings account.

Emergency Fund

Investing in SIPs can not only help you generate high returns in the future, but it can also work as an emergency fund.

If there are any contingencies or emergencies, you can always withdraw your investment and use the funds to meet your immediate requirements. You can invest in mutual funds through your Demat account maintained by your broker.

I hope you like this post on best pharma mutual funds in India. If you have invested in any other healthcare mutual funds that have given awesome returns, then share with us. You can express your views and suggestion in the comments.

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Published on: Dec 04, 2018

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