Best Pharma Mutual Funds to invest in 2020 | Top 5 Healthcare Funds in India

Best Pharma Mutual Funds to invest in 2020 - Top 5 Healthcare Funds in IndiaBest Pharma Mutual Funds to invest in 2020


One of the best sector that is outperforming is Pharma and healthcare now. While Pharma sector was an evergreen sector in the last 10-15 years, it has been under performer in the last 4-5 years. Due to covid-19 pandemic, pharma companies have again come in the limelight. Pharma mutual funds would invest in pharma and healthcare companies in India. Pharma sector is expected to continue to outperform in the next 1-2 years. If you are planning to invest in sector funds for short term of 6 months to 3 years, pharma mutual funds could be the best bet. Which are the best pharma mutual funds to invest in 2020? Which are the top 5 healthcare funds in India?

Also Read: Best Banking and PSU Debt funds in India

What is a Pharma Mutual Fund?

Pharma and healthcare mutual funds would invest in companies that are part of pharma and healthcare sector.  This sector has been performing well till 2016 (3.5 to 4 years back). However, from 2016 onwards, this sector is lagging compared to other sectors. Due to covid-19, pharma and healthcare sector has again come into limelight. This sector is expected to continue to outperform for the next couple of years.

How we filtered Pharma and Healthcare Funds?

Here are the simple criteria used.

1) Funds that have performed well in the last 3 to 5 years are considered.

2) Funds that have performed well in the short term of 3 to 6 months are considered (due to recovery post covid-19 pandemic)

3) Eliminated certain funds that have high expense ratios.

4) Removed certain funds that have low AUM.

5) Considered only regular funds in this category when indicating the performance. Direct plan performance would be higher as there are no commission paid to MF brokers on such funds.

Best Pharma Mutual Funds to invest in 2020 | Top 5 Healthcare Funds in India

Here are the list of top and best pharma mutual funds in India to invest in 2020.

#1 – DSP Healthcare Fund

#2 – Mirae Asset Healthcare Fund

#3 – ICICI Prudential Pharma Healthcare And Diagnostics (P.H.D) Fund

#4 – SBI Healthcare Opportunities Fund

#5 – Nippon India Pharma Fund (erstwhile Reliance Pharma Fund)

#6 – Tata India Pharma & HealthCare Fund

Let us check the performance of these top 5 healthcare funds now. Note certain funds has been launched only in the last 3 years, hence you would see “NA” in the performance category. While we have provided top performing pharma funds in the last 1 year, if you wish, you can invest only in pharma funds that performed well in the long run.

#1 – Performance, AUM and expense ratios of DSP Healthcare Fund

Fund NameDSP Healthcare Fund
AUM - Rs Crores571
Expense Ratio (%)2.6%
Returns - 3 months28%
Returns - 6 months34%
Returns - 1 Year66%
Annualised Returns - 3 YearsNA
Annualised Returns - 5 YearsNA

#2 – Performance, AUM and expense ratios of Mirae Asset Healthcare Fund

Fund NameMirae Asset Healthcare Fund
AUM - Rs Crores640
Expense Ratio (%)2.4%
Returns - 3 months24%
Returns - 6 months39%
Returns - 1 Year62%
Annualised Returns - 3 YearsNA
Annualised Returns - 5 YearsNA

#3 – Performance, AUM and expense ratios of ICICI Prudential Pharma Healthcare And Diagnostics (P.H.D) Fund

Fund NameICICI Prudential Pharma Healthcare And Diagnostics (P.H.D) Fund
AUM - Rs Crores1,523
Expense Ratio (%)2.3%
Returns - 3 months25%
Returns - 6 months36%
Returns - 1 Year57%
Annualised Returns - 3 YearsNA
Annualised Returns - 5 YearsNA

#4 – Performance, AUM and expense ratios of SBI Healthcare Opportunities Fund

Fund NameSBI Healthcare Opportunities Fund
AUM - Rs Crores1,154
Expense Ratio (%)2.4%
Returns - 3 months22%
Returns - 6 months31%
Returns - 1 Year55%
Annualised Returns - 3 Years10%
Annualised Returns - 5 Years3%

#5 – Performance, AUM and expense ratios of Nippon India Pharma Fund (erstwhile Reliance Pharma Fund)

Fund NameNippon India Pharma Fund
AUM - Rs Crores3,093
Expense Ratio (%)2.1%
Returns - 3 months20%
Returns - 6 months33%
Returns - 1 Year55%
Annualised Returns - 3 Years19%
Annualised Returns - 5 Years8%

#6 – Performance, AUM and expense ratios of Tata India Pharma & HealthCare Fund

Fund NameTata India Pharma & HealthCare Fund
AUM - Rs Crores241
Expense Ratio (%)2.4%
Returns - 3 months19%
Returns - 6 months29%
Returns - 1 Year46%
Annualised Returns - 3 Years14%
Annualised Returns - 5 YearsNA

Here is the consolidated list of best pharma mutual funds to invest now


Best Pharma mutual funds to invest now in 2020

You may like: Best Balanced Mutual Funds for moderate risk takers

FAQs about Pharma Mutual Funds

1) Which is the best pharma mutual fund?

A fund that has performed well now can under perform later and vice versa. One can filter funds based on past performance as a first step and do some more research on how such funds performed during various market cycles. The above list of pharma mutual funds are picked based on these parameters. Investors can invest in 2-3 funds instead of investing in a single fund to avoid any under performance of such fund in future. This way you would be investing in some of the best pharma mutual funds.

2) Is it good to invest in pharma mutual funds?

Pharma sector is currently doing well due to covid-19 pandemic. It is expected to continue to outperform for the next couple of years. However, investing in the single sector fund is always a high risk. One need to keep close watch on such sector. You should allocate small portion of your investment portfolio in sector funds.

3) Which is the best pharma fund as per value research?

Pharma funds are sector funds, hence value research does not rate them (with 1 star to 5 stars). However, based on the performance in the last 5 years, here is the list of top pharma funds as per value research in 2020.

  • Nippon India Pharma Fund
  • SBI Healthcare Opportunities Fund

4) Which are the best pharma index funds in India?

Currently there are no pharma index funds in India. If you wish, you can invest in some of the Best Sensex Index Mutual Funds in India.

5) Can I invest only in top pharma mutual funds in India that performed well in medium to long term instead of short term performance?

Generally, I keep providing analysis based on medium to long term performance. Since there are several new mutual funds entrants in this category + covid-19 pandemic has brought opportunities for pharma and healthcare sector, we have considered funds launched in the last 3 years too. If you wish to invest in funds that performed well in medium to long term, you can ignore funds where the performance is showing “NA” in the above list.

6) Who can invest in Pharma and Healthcare Funds?

Such funds invest only in one sector and are high risk. If you are a high risk investor and believe that pharma sector is going to do well, you can invest in these funds for short to medium term (2-3 years time frame). Low risk investors or long term investors should avoid such funds.

One should note that past performance of these mutual funds is an indicative and not guaranteed in the future.

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Suresh KP
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9 comments

  • Sreekesh M

    Dear Suresh Ji,
    As you mentioned to invest for short term, will SIP give a standard return? And seems pharma is on the highest level. Is there anymore space to grow these sector fund further? Please advise.

    • Hello Sreekesh, SIP can give returns, but it could be low as you would be investing for short term. There is a still scope in this sector and one can invest. However sector funds are high risk. One should note this before investing in such funds.

  • Satya

    Can you advise some pharma stocks to buy for small time retail investors

  • Ashutosh

    I have Nippon MF since 2 years now. 53% returns. Most of it in last 3 months.
    But Suresh, would it be advisable to enter or add more in this already run up sector? Kindly advise

    • Ashutosh, As indicated in the article, sector funds would perform extremely well in short term. Now its the turn of pharma funds. Keep a track regularly if you are investing in such sector funds. One should invest a small amount of their portfolio only in sector funds.

  • Manu Jaidka

    Suresh sir..many thanks for the comparative analysis. I shall invest in 2-3 funds based on your analysis.

    • Good to hear you liked our article. Pls share this on your FB / Twitter where it might be useful to your friends too.

      As indicated, invest small portion of your portfolio in such sector funds.

  • Soni

    Suresh ji very nice article in today’s uncertain times. Request you to include table at the end giving comparison of all the above funds which makes the comparison easy and better to understand. It used be there in your earlier articles

    • Hi Vivekji, Some readers commented earlier that it is repetition at individual funds level + consolidation level, hence was avoiding to put the consolidated list. Request honored. I have added the consolidated table now 🙂

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