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Best Performing Indian Pharma Mutual Funds in 2020

Globally, India is the third-largest pharmaceutical market in terms of volume. It is expected to grow to USD 55 billion at a CAGR of 15.92% by the year 2020 and at USD 100 billion by 2025. This long-term growth of the Indian pharma sector looks promising. Pharma Mutual Funds are a sector-specific fund that invests in different pharmaceutical companies. Due to a huge population of India, there has always been a high demand for medicines and other health care needs because of which pharma companies have been earning good profits. Major players in this sector are Sun Pharmaceuticals, Cipla, Lupin, Dr. Reddy’s Labs, Aurobindo Pharma, Glenmark Pharmaceuticals, etc. They have been constantly doing well in the market.

Pharma Equity Funds in India

Pharma funds belong to the equity sectoral fund category which mainly invests in pharma and pharma related stocks. These funds focus to create long-term wealth for the investors by taking advantage of the growth in the Pharmaceutical sector. In India, there are only four pharma funds, i.e., Reliance Pharma Fund, TATA India Pharma & Healthcare Fund, UTI Healthcare Fund, and SBI Healthcare Opportunities Fund. SBI Healthcare Opportunities Fund was earlier known as SBI Pharma and UTI Healthcare Fund was named as UTI Pharma & Healthcare Fund.

Reliance Pharma Fund (now Nippon India Pharma Fund) has been in the market since 2004 and has delivered 20.8% returns since inception, whereas SBI Healthcare Opportunities Fund has also been in the market since 2004 and has delivered 12.9% returns since inception. In the year 2014, SBI Healthcare Opp Fund delivered 56.8% (absolute) returns. UTI Healthcare Fund is one of the oldest pharma fund, launched in the year 1999 and has delivered 13.5% returns since its launch. TATA India Pharma & Healthcare Fund is in the market since 2015.

The category average of pharma funds stood at 131.79% over 1 year period ended 5 March 2010. Three out of four funds have outpaced BSE Healthcare over the same time period. The Reliance Pharma Fund has topped the category over a year period. The category average has been 19.77% and 18.81% during the three years and five years' time period.

Best Pharma Sector Mutual Funds to Invest in India

Being a sector-specific fund, pharma funds carry a huge risk of investment. Investors who have an in-depth knowledge of the pharma and healthcare industry are only advised to invest in these funds. One planning to invest in this fund should have a thorough knowledge of this sector and should be ready to bear a high-risk. Investors who think the pharma sector will give good returns in the future or can perform stably in the long-run can plan to invest in these funds.

Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2019 (%)
Nippon India Pharma Fund Growth ₹214.394
↓ -1.29
₹3,093 20.4 32.6 54.9 18.8 8 1.7
TATA India Pharma & Healthcare Fund Growth ₹12.7432
↑ 0.01
₹241 19.1 29.3 46.5 13.8   5.5
UTI Healthcare Fund Growth ₹122.34
↓ -0.12
₹481 24 35.7 56.2 13 4.4 1.2
SBI Healthcare Opportunities Fund Growth ₹167.903
↓ -0.40
₹1,154 22 30.7 55.1 10 2.9 -0.5
Note: Returns up to 1 year are on an absolute basis & more than 1 year are on a CAGR basis. (as on 7th August 2020)

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