Mutual Funds is a company that pools money from many investors and invests the money in securities. For this purpose assets management company have a fund manager who manages all this process and tries to provide the best return to its investors. In this post, we will try to explain to you the Best Pharma Mutual Funds to Invest in 2021.
Sector Mutual Funds
According to the different schemes of mutual funds, Sector Mutual Funds are equity schemes that invest in specific sectors of the economy. These stocks can be economy, energy, infrastructure, pharma, technology, banks, etc. These funds allow people to invest in the best-performing stocks in the specified sectors.
The best sectoral pharma funds are those that have consistently outperform their peers and beaten the broad benchmarks. The best funds stand out among others. The financial ratios of the best funds will be in much better shape than others and they quickly catch the interest of the potential investors.
- Lack of diversification means if the sector faces challenging times, so will your investments.
- Not more than 10% of your portfolio should be allocated to this fund category.
- If you invest, be prepared to stay invested for at least 7+ years.
Pharma Mutual Funds
Healthcare mutual funds are also known as Pharma Mutual Funds. This is one of the sectoral mutual fund’s type and primarily invest in Pharmaceuticals stocks in India.
Due to the huge population of India, there has always been a high demand for medicine and other health care needs because of which pharmaceutical companies earning a good rate of profit. In terms of volume, India is the third-largest pharmaceuticals market globally.
On the other hand, considering the current scenario of coronavirus there is a huge demand for medicine. It is one of the good reasons to invest in Pharma Sector Mutual Funds.
Pharma Mutual Funds are buzzing ever since the onset of the COVID-19 pandemic. Investors have pumped big money into this sector as these companies are playing a crucial role in developing a vaccine to treat the COVID-19 infection. This sector is expected to continue doing well shortly. Major players in this sector are- Sun Pharmaceuticals, Cipla, Lupin, Dr. Reddy’s Lab, Aurobindo Pharma, Glenmark Pharmaceuticals, etc., they have been constantly doing well in the market.
If you are willing to a good rate of return in 2021, a pharma mutual fund may be the best option to invest in mutual funds. Here is the list of Best Pharma Mutual Funds to Invest in 2021.
Best Pharma Mutual Funds to Invest in 2021 in India
Pharma Mutual Funds focus to create long-term wealth for the investors by taking advantage of the growth in the Pharmaceuticals Sector. In mutual funds, you can invest through a Systematic Investment Plan (SIP), and/or you can choose the lump sum option.
The investors can start investing in SIP with a minimum amount of Rs. 500. The below chart will show you the return performance (CAGR) of Pharma Mutual Funds. Through this analysis of return, you can choose Best Pharma Mutual Funds to invest in 2021.
| Best Pharma Mutual Funds to Invest in 2021 (Direct Plan) | Scheme Size (Cr.) | 3 Yr (%) | 5 Yr (%) |
|---|---|---|---|
| Nippon India Pharma Fund (G) | 5446.95 | 29.49 | 18.38 |
| Tata India Pharma & Healthcare Fund (G) | 563.54 | 28.78 | 17.65 |
| UTI Healthcare Fund (G) | 872.40 | 27.14 | 13.79 |
| SBI Healthcare Opportunities Fund (G) | 2003.70 | 27.45 | 11.94 |
| Aditya Birla Sun Life Pharma & Healthcare Fund (G) | 571.15 | NA | NA |
Source- Paytm Money as of 30th June 2021 – Best Pharma Mutual Funds to Invest in 2021
Nippon India Pharma Fund
Nippon India Pharma Fund is an equity-sectoral fund that was launched on 05 June 2004. It is a fund with High Risk and has given a CAGR/Annualized return of 22.3% since its launch, Ranked 35 in the Sectoral category. Return for 2020 was 66.4%, 2019 was 1.7% and 2018 was 3.6%.
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Tata India Pharma & Healthcare Fund
Tata India Pharma & Healthcare Fund is an equity sectoral fund that was launched on 28 December 2015. It is a fund with high risk and has given a CAGR/Annualized return of 11% since its launch. Return for 2020 was 64.40%, 2019 was 5.5% and 2018 was -2.6%.
UTI Healthcare Fund
UTI Healthcare Fund is an equity sectoral fund that was launched on 28 June 1999. It is a fund with high risk and has given a CAGR/Annualized return of 15.2% since its launch. Ranked 40 in the sectoral category. Return for 2020 was 67.40%, 2019 was 1.2% and 2018 was -7.5%.
SBI Healthcare Opportunities Fund
SBI Healthcare Opportunities Fund is an equity sectoral fund that was launched on 31st December 2004. It is a fund with high risk and has given a CAGR/Annualized return of 15.4% since its launch. Ranked 34 in the sectoral category. Return for 2020 was 65.80%, 2019 was -.50% and 2018 was -9.9%.
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Taxation of Sectoral Pharma Mutual Funds
As per the Budget 2020 amendments, the dividends offered by all mutual fund schemes are taxed classically. They are added to the overall income of investors and taxed at their respective income tax slab rates. Previously, dividends were made tax-free in the hands of investors as the fund houses paid dividend distributions tax (DDT).
You realize short-term capital gains on selling your fund units within a holding period of one year. These gains are taxed at a flat rate of 15%, irrespective of your income tax slab. Long-term capital gains are realized by redeeming your units after a holding period of one year. These gains of up to Rs 1 lakh a year are tax-free. Anything above this limit attracts tax at the rate of 10%, and there is no benefit of indexation provided.
Nifty Pharma Index Fund
Generally, Pharma Mutual Funds follow the similar composition of stocks tracking Nifty Pharma Index or CNX Pharma Index as this index is the benchmark for Pharma Sector Mutual Funds. Although Pharma Mutual Funds might not necessarily replicate the same ratios and components.
How to Invest in Mutual Funds?
After getting knowledge about “Best Pharma Mutual Funds to Invest in 2021”, it is necessary to know how to invest in mutual funds.
To invest in mutual funds, you can choose the offline or online mode as well. Making an offline investment in mutual funds makes a lot of paperwork. To avoid paperwork, it is better to invest online for which you can choose Upstox.
Upstox is a platform, where you can invest online through its web or app. There is no paperwork and all the procedure is online with e-KYC facilities.
Here is the link to Upstox, through which you can invest online in more than 2000 mutual funds. You can choose the best mutual fund of your choice and study all the detailed analyses.
Frequently Asked Questions- FAQs
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Which pharma mutual fund is best to buy?
Healthcare mutual funds are also known as Pharma Mutual Funds. This is one of the sectoral mutual fund’s type and primarily invest in Pharmaceuticals stocks in India. Here is the list of the top 5 Best Pharma Mutual Funds to invest in 2021 in India-
1) Nippon India Pharma Fund (G)
2) Tata India Pharma & Healthcare Fund (G)
3) UTI Healthcare Fund (G)
4) SBI Healthcare Opportunities Fund (G)
5) Aditya Birla Sun Life Pharma & Healthcare Fund (G) -
Is it good to invest in a pharma mutual fund now?
Due to the huge population of India, there has always been a high demand for medicine and other health care needs because of which pharmaceutical companies earning a good rate of profit. In terms of volume, India is the third-largest pharmaceuticals market globally.
On the other hand, considering the current scenario of coronavirus there is a huge demand for medicine. It is one of the good reasons to invest in Pharma Sector Mutual Funds.
If you are willing to a good rate of return in 2021, a pharma mutual fund may be the best option to invest in mutual funds.
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What are the top 5 mutual funds?
Axis Bluechip Fund DP (G)
Canara Robeco Bluechip Equity Fund DP (G)
Quant Active Fund DP (G)
Principal Multi Cap Growth Fund DP (G)
Invesco India Multi Cap Fund DP (G) -
What are the top 10 mutual funds?
Axis Bluechip Fund DP (G)
Canara Robeco Bluechip Equity Fund DP (G)
Quant Active Fund DP (G)
Principal Multi Cap Growth Fund DP (G)
Invesco India Multi Cap Fund DP (G)
Axis Midcap Fund DP (G)
Kotak Emerging Equity Fund DP (G)
PGIM India Midcap Opportunities Fund DP (G)
SBI Small Cap Fund DP (G)
Nippon India Small Cap Fund DP (G) -
Is it good to invest in pharma mutual funds now?
Due to the huge population of India, there has always been a high demand for medicine and other health care needs because of which pharmaceutical companies earning a good rate of profit. In terms of volume, India is the third-largest pharmaceuticals market globally.
On the other hand, considering the current scenario of coronavirus there is a huge demand for medicine. It is one of the good reasons to invest in Pharma Sector Mutual Funds.
Pharma Mutual Funds are buzzing ever since the onset of the COVID-19 pandemic. Investors have pumped big money into this sector as these companies are playing a crucial role in developing a vaccine to treat the COVID-19 infection. This sector is expected to continue doing well soon.
If you are willing to a good rate of return in 2021, a pharma mutual fund may be the best option to invest in mutual funds and you can invest in Best Pharma Mutual Funds to invest in 2021
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Is it the right time to invest in pharma mutual funds?
Due to the huge population of India, there has always been a high demand for medicine and other health care needs because of which pharmaceutical companies earning a good rate of profit. In terms of volume, India is the third-largest pharmaceuticals market globally.
On the other hand, considering the current scenario of coronavirus there is a huge demand for medicine. It is one of the good reasons to invest in Pharma Sector Mutual Funds.
Pharma Mutual Funds are buzzing ever since the onset of the COVID-19 pandemic. Investors have pumped big money into this sector as these companies are playing a crucial role in developing a vaccine to treat the COVID-19 infection. This sector is expected to continue doing well soon.
If you are willing to a good rate of return in 2021, a pharma mutual fund may be the best option to invest in mutual funds.
Here is the list of the top 5 Best Pharma Mutual Funds to invest in 2021 in India-
1) Nippon India Pharma Fund (G)
2) Tata India Pharma & Healthcare Fund (G)
3) UTI Healthcare Fund (G)
4) SBI Healthcare Opportunities Fund (G)
5) Aditya Birla Sun Life Pharma & Healthcare Fund (G) -
Which are the best Sectoral-Pharma Mutual Funds to invest in 2021?
These are the top 5 Best Pharma Mutual Funds to invest in 2021
1) Nippon India Pharma Fund (G)
2) Tata India Pharma & Healthcare Fund (G)
3) UTI Healthcare Fund (G)
4) SBI Healthcare Opportunities Fund (G)
5) Aditya Birla Sun Life Pharma & Healthcare Fund (G) -
How long Should I stay invested in sectoral-pharma mutual funds?
Since sectoral-pharma mutual funds are equity mutual funds and they invest in the stock of companies, you need to stay invested for at least 5 years.
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Where do pharma mutual funds invest?
Healthcare mutual funds are also known as Pharma Mutual Funds. This is one of the sectoral mutual fund’s type and primarily invest in Pharmaceuticals stocks in India. The equity sectoral-pharma mutual funds category invests at least 80% of its assets in the stocks of companies pertaining to the pharma sector in India.
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Are pharma mutual funds high risk?
Pharma Mutual Funds invest in equity companies shares, so in short term, they can be volatile. However, over the long term, the risk comes down substantially.
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Should I invest in Pharma Mutual Funds?
Due to the huge population of India, there has always been a high demand for medicine and other health care needs because of which pharmaceutical companies earning a good rate of profit. On the other hand, considering the current scenario of coronavirus there is a huge demand for medicine. It is one of the good reasons to invest in Pharma Sector Mutual Funds.
If you are willing to a good rate of return in 2021, a pharma mutual fund may be the best option to invest in mutual funds. Here is the list of the top 5 Best Pharma Mutual Funds to invest in 2021 in India-
1) Nippon India Pharma Fund (G)
2) Tata India Pharma & Healthcare Fund (G)
3) UTI Healthcare Fund (G)
4) SBI Healthcare Opportunities Fund (G)
5) Aditya Birla Sun Life Pharma & Healthcare Fund (G) -
Is it good to invest in Nippon Pharma Fund?
Nippon India Pharma Fund has been in the market since 2004 and has delivered a 21.77% return since inception. According to the Paytm Money classification of Pharma Mutual Funds, Nippon India Pharma Fund is at no. 1in Equity Sectoral Pharma Funds. Here you can invest only with a small amount of Rs. 100. The Scheme Assets size is 5446.95 Crores as of 30th June 2021 and it gives a return of 18% in the last five years, 32% in the last 3 years, and 60% return in the last 1 year.
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Disclaimer: The information contained in the above article are solely for informational purpose after exercising due care. However, it does not constitute professional advice or a formal recommendation. The author does not own any responsibility for any loss or damage caused to any person, directly or indirectly, for any action taken based on the above article.
Shares/Mutual Funds on my blog are provided for educational purposes only and do not constitute specific financial, trading, or investment advice. Please consult your financial adviser before taking any position in the stock/s mentioned.
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