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Pharma sector mutual funds have outperformed all other mutual fund categories in the last one year. Pharma mutual funds are topping the return charts with over 58% returns in the last one year. The category has outpaced gold mutual funds which grew by over 37% in the same time period. Pharma funds on an average have grown by over 45% year-to-date.
The benchmark index for pharma funds, Nifty pharma index grew by 51.5% in the last one year and by 44% since the beginning of this year.
The sector is booming as investors rush towards defensive stocks due to uncertainty caused by the ongoing covid19 pandemic.
The one-year returns of nine pharma sector mutual funds fall between 48% and 70%, shows Value Research. DSP Healthcare Fund generated the highest returns of 69.80% in the last one year.
Mirae Asset Healthcare and ICICI Pru Pharma Healthcare & Diagnostics (P.H.D) Fund followed with 68% and 63% one-year returns respectively.
The category manages assets worth ₹9,035 crore. The largest fund in the category is Nippon India Pharma holding ₹3,496 crore AUM. The scheme gave 61% returns in the last one year.
Pharma sector has clearly outdone all other sectors in the last one year. Other sectors which gave positive returns include Nifty IT, Nifty Oil & Gas, Nifty Auto, Nifty FMCG and Nifty Energy. See the chart below for return comparison.
The attractive returns can lure anyone but investors should understand that the sector funds are not for everybody. Only those investors who understand the risks involved in sector funds and those who know how to play defensive can invest. Retail investors should stay away.
Pharma sector outperformed all other sectors in last one year
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