Pharma funds or healthcare funds are sector-specific funds that have their investments made in the pharma and healthcare sector. Pharma sector funds have performed incredibly well in until about 2016. Since 2016, their performance has been lagging.

Recently, IT sector funds (which were also lagging for some time) picked up in a grand way. Seeing this and considering various other factors, many believe that pharma sector will be next in line to pick up.

Here are some of the best pharma funds that you must explore if you want to bet on the performance of the pharma sector.

4 Best Sector Funds – at a glance

Reliance Pharma Fund
Fund Name 1Y 3Y 5Y Category Risk
Reliance Pharma Fund - Direct - Growth 15.77% 2.94% 15.54% Equity
(Sectoral/Thematic)
High
SBI Healthcare Opportunities Fund
Fund Name 1Y 3Y 5Y Category Risk
SBI Healthcare Opportunities Fund - Direct - Growth -0.49% -3.95% 12.18% Equity
(Sectoral/Thematic)
High
UTI Healthcare Fund
Fund Name 1Y 3Y 5Y Category Risk
UTI Healthcare Fund - Direct - Growth 1.9% -1.86% 9.85% Equity
(Sectoral/Thematic)
High
Tata India Pharma and Healthcare Fund
Fund Name 1Y 3Y 5Y Category Risk
Tata India Pharma And Healthcare Fund - Direct - Growth 6.3% NA NA Equity
(Sectoral/Thematic)
High

4 Best Pharma Funds (Healthcare Sector Funds) – Details

Lets us now look at the details  of the four best pharma funds:

1.Reliance Pharma Fund

The investment objective of this mutual fund is to generate consistent returns by investing in equity or fixed income securities of the pharma sector and other associated companies.

Over the years this fund has performed much better than its benchmark NIFTY Pharma.

The risk involved in this fund is moderately high. The fund size is Rs 1948 crores and the expense ratio is 1.65%.

Almost all the amount of this fund is invested in equities. Of the amount invested in equities, a majority is invested in large-cap companies, followed by mid-cap and small-cap companies. Sector allocation is majorly in the pharma sector followed by around 15% in healthcare services.

The minimum amount for first-time investment is Rs. 5000 and second investment onwards the minimum amount is Rs. 1000.

The minimum SIP amount is Rs. 100.

Fund Manager of Reliance Pharma Fund

Sailesh Raj Bhan is the fund manager of this fund.

NAV of Reliance Pharma Fund: Rs. 142.2421

Risk Moderately High
Expense Ratio 1.65 %
Fund size 1948 Cr

 

Top Holdings Sector Size
Divis Laboratories Ltd Pharma Large Cap
Abbott India Ltd Pharma Mid Cap
Sanofi India Ltd Pharma Mid Cap
Cipla Ltd Pharma Large Cap
Biocon Ltd Pharma Large Cap

Allocation

2.SBI Healthcare Opportunities Fund (New Name)

SBI Pharma Fund (Old Name)

The investment objective of the fund is to provide the investors maximum growth opportunity through equity investments in stocks of growth oriented sectors of the economy.

Over the years this fund has performed better than its benchmark NIFTY Pharma.

The 1-year and 3-year returns for this fund might be negative, but it is better than the benchmark. The risk involved in this fund is moderately high. The fund size is Rs 1133 crores and the expense ratio is 1.35%.

Almost the entire amount of this fund is invested in equities. Of the amount invested in equities, a majority is invested in large cap and mid cap followed by the small cap. Sector allocation is majorly in the pharma sector followed by around 14% in the healthcare services.

The minimum amount for first-time investment is Rs. 5000 and second investment onwards the minimum amount is Rs. 1000. The minimum SIP amount is Rs. 500.

Fund Manager of SBI Healthcare Opportunities Fund

Tanmaya Desai is the fund manager of SBI Healthcare Opportunities Fund.

NAV of Reliance Pharma Fund: Rs. 120.2535

Risk Moderately High
Expense Ratio 1.35 %
Fund size 1133 Cr

 

Top Holdings Sector Size
Cipla Ltd Pharma Large Cap
Sun Pharma Ltd Pharma Large Cap
Divis Laboratories Ltd Pharma Large Cap
Strides Shasun Ltd Pharma Mid Cap
Alkem Laboratories Ltd Pharma Large Cap

Allocation

3.UTI Healthcare Fund

The investment objective of this mutual fund is to invest in scrips of companies involved in the research, production or marketing of OTC products, bulk drugs, and formulations.

Over the years this fund has performed much better than its benchmark NIFTY Pharma.

The risk involved in this fund is moderately high. The fund size is Rs 385 crores and the expense ratio is 1.92%.

The minimum amount for first-time investment is Rs. 5000 and second investment onwards the minimum amount is Rs. 1000. The minimum SIP amount is Rs. 500.

Fund Manager of UTI Healthcare Fund

The fund managers of UTI Healthcare Fund are V Srivtsa and Ritesh Rathod.

NAV of UTI Healthcare Fund: Rs. 84.7822

Risk Moderately High
Expense Ratio 1.92 %
Fund size 385 Cr
Top Holdings Sector Size
Cipla Ltd Pharma Large Cap
Sun Pharma Ltd Pharma Large Cap
Torrent Pharmaceuticals Ltd Pharma Mid Cap
Pfizer Ltd Pharma Mid Cap
Alkem Laboratories Ltd Pharma Large Cap

Allocation

4.Tata India Pharma and Healthcare Fund

The investment objective of the fund is to attain long-term capital appreciation by investing at least 80% of its investments in equity and equity related instruments of companies in the pharma & healthcare sectors in the country.

However, there is no guarantee that the investment objective of the fund will be attained. The fund does not guarantee any returns.

Over the years this fund has performed much better than its benchmark NIFTY Pharma.

The risk involved in this fund is moderately high. The fund size is Rs 133 crores and the expense ratio is 1.26%.

Almost the entire amount of this fund is invested in equities.

Of the amount invested in equities, a majority is invested in large cap and mid-cap. Sector allocation is majorly in the pharma sector followed by around 4.5% in others.

The minimum amount forfirst-timee investment is Rs. 5000 and second investment onwards the minimum amount is Rs. 1000. Minimum SIP amount is Rs. 500.

Fund Manager of Tata India Pharma and Healthcare Fund

The fund managers of this pharma sector fund are Rupesh Patel and Sonam Udasi.

NAV of UTI Healthcare Fund: Rs. 8.6556

Risk Moderately High
Expense Ratio 1.26 %
Fund size 133 Cr

 

Top Holdings Sector Size
Piramal Enterprises Ltd Pharma Large Cap
Sun Pharma Ltd Pharma Large Cap
IPCA Laboratories Ltd Pharma Mid Cap
Divis Laboratories Ltd Pharma Large Cap
Syngene International Ltd Pharma Mid Cap

Allocation

Conclusion

Investors looking to specifically invest in these funds should keep in mind that not only the past performance but also the future allocations of the investment made in different companies play a vital role in the performance and the returns given by the fund to the investors.

If you think the pharma sector will give big returns in the future, you can explore investing in the above mentioned sector mutual funds.

Happy investing!

Disclaimer: the views expressed here are of the author and do not reflect those of Groww.