Best Pharma Mutual Funds to invest in India
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 Name | DSP Healthcare Fund |
|---|---|
| AUM - Rs Crores | 571 |
| Expense Ratio (%) | 2.6% |
| Returns - 3 months | 28% |
| Returns - 6 months | 34% |
| Returns - 1 Year | 66% |
| Annualised Returns - 3 Years | NA |
| Annualised Returns - 5 Years | NA |
#2 – Performance, AUM and expense ratios of Mirae Asset Healthcare Fund
| Fund Name | Mirae Asset Healthcare Fund |
|---|---|
| AUM - Rs Crores | 640 |
| Expense Ratio (%) | 2.4% |
| Returns - 3 months | 24% |
| Returns - 6 months | 39% |
| Returns - 1 Year | 62% |
| Annualised Returns - 3 Years | NA |
| Annualised Returns - 5 Years | NA |
#3 – Performance, AUM and expense ratios of ICICI Prudential Pharma Healthcare And Diagnostics (P.H.D) Fund
| Fund Name | ICICI Prudential Pharma Healthcare And Diagnostics (P.H.D) Fund |
|---|---|
| AUM - Rs Crores | 1,523 |
| Expense Ratio (%) | 2.3% |
| Returns - 3 months | 25% |
| Returns - 6 months | 36% |
| Returns - 1 Year | 57% |
| Annualised Returns - 3 Years | NA |
| Annualised Returns - 5 Years | NA |
#4 – Performance, AUM and expense ratios of SBI Healthcare Opportunities Fund
| Fund Name | SBI Healthcare Opportunities Fund |
|---|---|
| AUM - Rs Crores | 1,154 |
| Expense Ratio (%) | 2.4% |
| Returns - 3 months | 22% |
| Returns - 6 months | 31% |
| Returns - 1 Year | 55% |
| Annualised Returns - 3 Years | 10% |
| Annualised Returns - 5 Years | 3% |
#5 – Performance, AUM and expense ratios of Nippon India Pharma Fund (erstwhile Reliance Pharma Fund)
| Fund Name | Nippon India Pharma Fund |
|---|---|
| AUM - Rs Crores | 3,093 |
| Expense Ratio (%) | 2.1% |
| Returns - 3 months | 20% |
| Returns - 6 months | 33% |
| Returns - 1 Year | 55% |
| Annualised Returns - 3 Years | 19% |
| Annualised Returns - 5 Years | 8% |
#6 – Performance, AUM and expense ratios of Tata India Pharma & HealthCare Fund
| Fund Name | Tata India Pharma & HealthCare Fund |
|---|---|
| AUM - Rs Crores | 241 |
| Expense Ratio (%) | 2.4% |
| Returns - 3 months | 19% |
| Returns - 6 months | 29% |
| Returns - 1 Year | 46% |
| Annualised Returns - 3 Years | 14% |
| Annualised Returns - 5 Years | NA |
Here is the consolidated list of best pharma mutual funds to invest now
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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.
7) Which are the best Pharma Index Funds?
Currently there are no pharma index funds in India.
8) Which are the best Pharma ETFs in India?
None. Currently there are no ETFs that track Pharma sector
One should note that past performance of these mutual funds is an indicative and not guaranteed in the future.
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Very helpful Analysisi
Hi Suresh,
I’m new to MF investments. As per current situation it seems pharma sector will provide good returns. Please suggest should i invest lumpsum amount or should i go for SIP for one or two MF suggested by you.?
Nilesh, Never ever think one sector can alone grow your money. You should always diversify your portfolio. Invest small portion in sector funds like pharma funds. Yes Pharma is expected to perform well in 2021 too.