Best Pharma Sector Mutual Funds 2025

Investing in sectoral funds allows an investor not only to tap into the growth of a particular sector but also to diversify among various companies in that sector. The pharmaceutical sector is one of India’s largest industrial sectors with a compounded annual growth rate (CAGR) of over 9.43% in the past nine years. Here are some of the best pharma mutual funds that you can invest in and gain from India’s growing pharmaceutical industry.

Top Pharma Mutual Funds

Here are the best pharma mutual funds based on 3-year annualised returns.

(Data as of February 3, 2025)

Overview of the Best Pharma Funds in India

Let’s take a closer look at the best pharma sector mutual funds.

(Please note, the data is as of February 3, 2025)

SBI Healthcare Opportunities Fund Direct Plan - Growth

•       3Y Annualised Returns – 24.85%
•       Carries very high risk
•       Minimum SIP Amount – Rs 500
•       Assets Under Management (AUM) – Rs 3,628.03 crore
•       96.5% of the funds allocated to equity, 0.1% to debt, 3.4% held as cash
•       Expense Ratio – 0.89%
•       Inception Date – January 1, 2013

ICICI Prudential Pharma Healthcare and Diagnostics (P.H.D) Fund Direct - Growth

•       3Y Annualised Returns – 24.44%
•       Carries very high risk
•       Minimum SIP Amount – Rs 100
•       AUM – Rs 5,320.29 crore
•       98.1% of the funds allocated to equity and 1.9% held as cash
•       Expense Ratio – 1.08%
•       Inception Date – July 13, 2018

DSP Healthcare Fund Direct - Growth

•       3Y Annualised Returns – 22.95%
•       Carries very high risk
•       Minimum SIP Amount – Rs 100
•       AUM – Rs 3,339.79 crore
•       97.5% of the funds allocated to equity and 2.5% held as cash
•       Expense Ratio – 0.57%
•       Inception Date – November 30, 2018

Tata India Pharma & Healthcare Fund Direct - Growth

•       3Y Annualised Returns – 21.97%
•       Carries very high risk
•       Minimum SIP Amount – Rs 100
•       AUM – Rs 1,287.45 crore
•       94.9% of the funds allocated to equity and 5.1% held as cash
•       Expense Ratio – 0.71%
•       Inception Date – December 28, 2015

UTI Healthcare Fund Direct - Growth

•       3Y Annualised Returns – 20.99%
•       Carries very high risk
•       Minimum SIP Amount – Rs 500
•       AUM – Rs 1,235.91 crore
•       97.6% of the funds allocated to equity, 0.1% to debt, and 2.3% held as cash
•       Expense Ratio – 1.22%
•       Inception Date – January 1, 2013

ITI Pharma and Healthcare Fund Direct - Growth

•       3Y Annualised Returns – 20.29%
•       Carries very high risk
•       Minimum SIP Amount – Rs 500
•       AUM – Rs 230.79 crore
•       98.9% of the funds allocated to equity and 1.1% held as cash
•       Expense Ratio – 0.47%
•       Inception Date – November 8, 2021

Nippon India Pharma Fund Direct - Growth

•       3Y Annualised Returns – 19.85%
•       Carries very high risk
•       Minimum SIP Amount – Rs 100
•       AUM – Rs 8,914.19 crore
•       98.1% of the funds allocated to equity and 1.9% held as cash
•       Expense Ratio – 0.92%
•       Inception Date – January 1, 2013

Aditya Birla Sun Life Pharma & Healthcare Fund Direct - Growth

•       3Y Annualised Returns – 19.44%
•       Carries very high risk
•       Minimum SIP Amount – Rs 100
•       AUM – Rs 890.33 crore
•       96.5% of the funds allocated to equity and 3.5% held as cash
•       Expense Ratio – 0.94%
•       Inception Date – July 10, 2019

Mirae Asset Healthcare Fund Direct - Growth

•       3Y Annualised Returns – 19.36%
•       Carries very high risk
•       Minimum SIP Amount – Rs 99
•       AUM – Rs 2,863.52 crore
•       99.2% of the funds allocated to equity and 0.8% held as cash
•       Expense Ratio – 0.49%
•       Inception Date – July 2, 2018

LIC MF Healthcare Fund Direct - Growth

•       3Y Annualised Returns – 18.78%
•       Carries very high risk
•       Minimum SIP Amount – Rs 200
•       AUM – Rs 86.26 crore
•       97% of the funds allocated to equity and 3% held as cash
•       Expense Ratio – 1.22%
•       Inception Date – February 28, 2019

Advantages of Investing in the Best Pharma Mutual Funds

Since the pharma sector in India plays a crucial role in the country’s economic development, there are several key advantages of investing in the top pharma mutual funds in India.

Invest in Leading Pharma Companies

One of the key advantages of a pharma mutual fund is that it allows the investor to invest in the leading pharma companies in the country. By picking the right funds, an investor can get exposure to this growing sector.

Diversification

Managing risk is an important part of investing. By investing in a pharma sector mutual fund, the investor can not only spread his risks across various companies but also mitigate portfolio-level risk by investing in the sector.

Expert Management

Although an investor might want to invest in the healthcare sector, picking the right stocks and making informed decisions may pose a significant challenge. Investing in the pharma sector through a mutual fund solves this problem as the funds are managed by qualified professionals who are well-informed of the industry dynamics and are well-equipped to undertake the investment process.

Stable Returns

The pharma sector is considered to be a defensive sector and typically delivers stable returns in the long run. Adding a pharma mutual fund can help an investor earn potentially stable returns.

Things to Consider Before Investing in a Pharma Mutual Fund

Here are key points to consider before investing in a pharma mutual fund.

•       Most pharma mutual funds heavily allocate funds to equity which increases the risk of the investment. It is important to ascertain your risk profile before investing.
•       Similar to other sectors, an investor can benefit significantly by having a long-term investment horizon. Although the pharma sector is a defensive sector, it might face ups and downs. Staying invested for longer can help one ride out the short-term volatility.
•       Compare different mutual funds before investing. Study their past performance and associated costs like the exit loads and expense ratios.

Conclusion

India’s pharmaceutical sector has not only delivered growth to investors but has also risen to a significant level on the global stage. Given the growth story of the sector, many investors want to invest in leading pharma stocks. Investing in a pharma sector mutual fund makes the process of investing easy and also provides diversification. However, it is important to take into consideration the risks and associated costs before investing.

Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.

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Research Analyst - Bavadharini KS