Top 4 Best Performing Pharma Mutual Funds 2024

Pharma Mutual Funds are sector-specific fund that invests in different pharmaceutical companies.

Due to the 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. Read this entire article to know the Indian Pharma sector, it's growth and the best Pharma mutual funds to Invest.

Pharma Sector in India

The pharmaceutical sector in India is one of the largest in the world and plays a significant role in the country's Economy. The Industry is known for its low-cost generic drug production and is considered as the "pharmacy of the world." The sector is highly regulated and governed by the Drugs and Cosmetics Act, 1940, and the Drugs and Cosmetics Rules, 1945. India has a large number of domestic pharmaceutical companies, as well as several multinational corporations operating in the country. In recent years, the government of India has taken several initiatives to support the growth of the pharmaceutical sector, including tax incentives and investment in research and development.

India has an established domestic pharmaceutical industry, with a strong network of 3,000 drug companies and about 10,500 Manufacturing units. The industry has been growing rapidly in recent years and has been making significant contributions to the country's economy through exports. According to a report by the Pharmaceuticals Export Promotion Council of India (Pharmexcil), the pharmaceutical exports from India reached around $19 billion in 2020, with the major export markets being the US, Europe, Africa, and Asia.

Largest pharmaceutical companies in India by Market capitalization (as of August 2021) are — Sun Pharmaceutical, Cipla, Lupin, Dr. Reddy’s Labs, Aurobindo Pharma, Divi's Laboratories, Torrent Pharmaceuticals, Glenmark Pharmaceuticals, etc.

If you are keen to invest in the pharma sector fund, the following are the schemes listed for you.

Pharma Equity Funds in India

Pharma funds belong to the equity sectoral fund category which mainly invests in pharma and pharma related stocks. They focus to create a long-term wealth for the investors by taking advantage of growth in the Pharmaceutical sector. In India, some of the top performing funds are - Nippon India Pharma Fund, TATA India Pharma & Healthcare Fund, UTI Healthcare Fund and SBI Healthcare Opportunities Fund.

Nippon India Pharma Fund is in the market since 2004 and has delivered 21.12% returns since inception, whereas UTI Healthcare Fund was launched in 2005 and delivered returns of 18.42% since inception.

SBI Healthcare Opportunities Fund is one of the oldest pharma fund, launched in the year 1999 and has delivered 15.59% returns since its launch.

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 India Pharma Fund has topped the category over one year period. The category average has been 19.77% and 18.81% during three years and five years time period.

Best Pharma Sector Funds 2024

Nifty Pharma Index

Generally Pharma Mutual funds follow similar composition of stocks tracking Nifty Pharma Index or CNX Pharma Index as this index is benchmark for Pharma Sector Mutual Funds. Although Pharma Mutual Funds might not necessarily replicate same ratios and components.

Portfolio Characteristics

Top Constituents by Weightage

Constituents companies of Nifty Pharma Index with weightage

As on Jan, 2023

To more about index can be read on official website Nifty Pharma Index Document

Who Should Invest in Pharma Mutual Funds?

Being a sector-specific fund, pharma funds carry a huge risk of investment. Investors having an in-depth knowledge of the pharma and healthcare industry are only advised to invest. Also, the ability to bear a high-risk. Investors who think the pharma sector will give good returns in the future or can perform stable in the long-run can invest.

Healthcare Sector in India

1. Public Healthcare

Public healthcare is free for those who are below the poverty line. It encompasses 18% of total outpatient care and 44% of total inpatient care. Middle and upper class individuals tend to use public healthcare less than those with a lower standard of living. Additionally, females and elderly use public services more. The public health care system was originally developed in order to provide a means to healthcare access regardless of socioeconomic status. However, reliance on public and private healthcare sectors varies significantly between states. Several reasons are cited for relying on the private rather than public sector; the main reason at the national level is poor quality of care in the public sector, with more than 57% of households pointing to this as the reason for a preference for private health care.

Most of the public healthcare caters to the rural areas; and the poor quality arises from the reluctance of experienced healthcare providers to visit the rural areas. Consequently, the majority of the public healthcare system catering to the rural and remote areas relies on inexperienced and unmotivated interns who are mandated to spend time in public healthcare clinics as part of their curricular requirement. Other major reasons are distance of the public sector Facility, long wait times, and inconvenient hours of operation.

Different factors related to public healthcare are divided between the state and national government systems in terms of making decisions, as the national government addresses broadly applicable healthcare issues such as overall family welfare and prevention of major diseases, while the state governments Handle aspects such as local hospitals, public health, promotion and sanitation, which differ from state to state based on the particular communities involved. Interaction between the state and national governments does occur for healthcare issues that require larger scale resources or present a concern to the country as a whole.

2. Private healthcare

Since 2005, most of the healthcare capacity added has been in the private sector, or in partnership with the private sector. The private sector consists of 58% of the hospitals in the country, 29% of beds in hospitals, and 81% of doctors. According to National Family Health Survey-3, the private medical sector remains the primary source of health care for 70% of households in urban areas and 63% of households in rural areas. The study conducted by IMS Institute for Healthcare Informatics in 2013, across 12 states in over 14,000 households indicated a steady increase in the usage of private healthcare facilities over the last 25 years for both Out Patient and In Patient services, across rural and urban areas. In terms of healthcare quality in the private sector, a 2012 study by Sanjay Basu et al., published in PLOS Medicine, indicated that health care providers in the private sector were more likely to spend a longer duration with their patients and conduct physical exams as a part of the visit compared to those working in public healthcare.

However, the high out of pocket cost from the private healthcare sector has led many households to incur Catastrophic Health Expenditure, which can be defined as health expenditure that threatens a household's capacity to maintain a basic standard of living. Costs of the private sector are only increasing. One study found that over 35% of poor Indian households incur such expenditure and this reflects the detrimental state in which Indian health care system is at the moment.

With government expenditure on health as a percentage of GDP falling over the years and the rise of private health care sector, the poor are left with fewer options than before to access health care services. Private insurance is available in India, as are various through government-sponsored health insurance schemes. According to the World Bank, about 25% of India's population had some form of health insurance in 2010. 2014 Indian government study found this to be an over-estimate, and claimed that only about 17% of India's population was insured.

How to Invest in Pharma Sector Funds Online?

1. Open Free Investment Account for Lifetime at Fincash.com.

2. Complete your Registration and KYC Process

3. Upload Documents (PAN, Aadhaar, etc.). And, You are Ready to Invest!

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