According to the India Brand Equity Foundation, the Indian pharmaceutical industry ranks third for pharmaceutical production by volume in the world. Recent government measures such as the recently approved PLI scheme for the pharmaceutical industry have been extended from FY 21 to FY 29. With the boost there will be an investment worth Rs. 15,000 crore in the area. In addition, the pandemic epidemic has only improved the outlook.

Market size:

As of 2021, the pharmaceutical industry market according to the Indian Economy Survey is estimated at US $ 42 billion in 2021 and is expected to reach US $ 65 billion by 2024 and reach US $ 120-130 billion. US dollars by 2030.

Amid all these efforts and the recent aggression the industry is witnessing due to the Covid 19 vaccine surge etc, it won’t be wrong to bet on the history of India’s pharmaceutical growth.

But is the sector suitable for all investors. Here, we’ll discuss it briefly before listing the top performing mutual funds.

What Are Pharmaceutical Mutual Funds and Who Should Invest in Pharmaceutical Mutual Funds?

Pharmaceutical mutual funds are a category of sectoral or thematic mutual fund that invests primarily in companies in the pharmaceutical industry. In fact, they have been given the mandate to invest 80 percent of the corpus in the pharmaceutical industry. Thus, the performance of the fund depends on the performance of the industry. Over the past 2 years, therefore, overall these funds will be ideal for affluent and sophisticated investors who also have a good appetite for risk.

1. UTI Health Fund:

The pharmaceutical equity fund has an AUM of Rs. 852 crore as of May 31, 2021. The fund carries high risk and even a high expense ratio of 2.69%.

Ideally, those looking to diversify their portfolio or those who can afford a higher risk can bet on the fund. The SIP in the fund can be started for Rs. 500 while for the lump sum the minimum investment required is Rs. 5000. The benchmark of the fund is the S&P BSE Healthcare TRI.

RS. 10,000 monthly SIPs started in the fund 3 years ago became Rs. 6.10 lakh, here the amount invested was equivalent to Rs. 3.6 lakh.

The main holdings of the fund are Dr. Reddy’s, Aurobindo Pharma, Cipla, Sun Pharma, Divi’s Lab.

2. ICICI Prudential Pharma Healthcare and Diagnostics (PHD) Fund:

The fund size of ICICI Prudential Healthcare Fund is Rs. 2,683 crores. The fund’s expense ratio is 2.19%. The fund’s corpus is made up of equities and instruments linked to equities in pharma, healthcare, hospitals, diagnostics, welfare, etc. The fund was launched in 2018.

The SIP in the fund can be started for as little as Rs. 100. The minimum investment for a lump sum investment should be Rs. 5000.

A SIP of Rs. 10,000 per month has increased in value to Rs. 1.44 lakh, while Rs. A flat-rate investment of 1 lakh is equivalent to Rs. 1.58 lakh.
Some of the major holdings of the fund include Sun Pharma, Cipla, Divi’s, Alkem, Dr. Reddy’s, etc.

3. Nippon India Pharma Fund:

The fund has an asset size of Rs. 5,237.9 crores. The high risk fund also has an expense ratio of 1.95%. Ideally suited for investors who understand macros and want to bet on riskier funds for better returns than equity mutual funds.

The SIP in the fund can be started for Rs. 100 only and the fund was launched in 2004. The return since the inception of the fund has been 22.19%.
The main holdings of the fund are Cipla, Dr. Reddy’s, Divi’s, Aurobindo Pharma, Sun Pharma etc.Rs. 10,000 monthly SIPs over 3 years with an investment of Rs. 3.6 lakh is worth Rs. 6.31 lakh.

Warning:

There are risks associated with investing in mutual funds. Individuals must do their own research and analysis. In fact, the pharmaceutical fund category is even riskier than equity mutual funds, so better suited for people with a high risk appetite. Please note, the data here is for informational purposes only.

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