The Covid-19 pandemic has made some sectors perform well. One such sector is pharmaceuticals and healthcare.

Indian pharma companies have had their share of regulatory troubles in the past few years, but the pandemic has brought them back into focus, with some stocks performing handsomely.

The increased focus on healthcare across the world has led to the outperformance of the pharma sector.

This has piqued investors’ interest in the sector, which had been going through a difficult phase in the past few years.

To put it into perspective, in the past one year, the Nifty 50 index has fallen nearly 14 per cent while the S&P BSE Healthcare index has risen 26 per cent.

There are nine pharma- or healthcare-themed mutual funds in the market. Out of these, only three funds — Nippon India Pharma, SBI Healthcare Opportunities and UTI Healthcare — have a track record of more than five years.

Tata India Pharma & Healthcare has a track record of around four-and-a-half years.

Four funds — DSP Healthcare, IDBI Healthcare, Mirae Asset Healthcare, ICICI Prudential Pharma Healthcare and Diagnostics — have a track record of less than two years.

Aditya Birla Sun Life Pharma & Healthcare Fund has a track record of less than a year.

In the past one year, Mirae Asset Healthcare has outperformed its benchmark and category with a return of 37.9 per cent; the category average return was 32.2 per cent.

In the same time frame, DSP Healthcare has also managed to beat the pharma-themed funds stalwart — Nippon India Pharma — with a return of 34.8 per cent.

Nippon India Pharma, too, delivered healthy returns of around 33 per cent.

Nippon India Pharmahas outperformed its benchmark and category across two-, three- and five-year time periods.

Its consistency over the long term makes it a good bet for investors looking to play the pharma and healthcare theme over the next few years.

Most of Mirae Asset Healthcare Fund’s outperformance has come from the scheme increasing its exposure to Aurobindo Pharma’s stock by three times from March 2020 to the end of April 2020.

The stock has more than doubled over the past two months and helped Mirae Asset Health best its category.

At the end of April 2020, the fund had 5.3 per cent of its corpus deployed in Aurobindo Pharma.

Similarly, DSP Healthcare doubled its exposure (from end of March 2020 to April 2020) in one stock — Jubilant Life Sciences — which helped it beat Nippon India Pharma in the one-year time-frame. Jubilant Life Sciences stock has doubled from the end of March 2020 till now.

The fund has deployed 3.3 per cent of its corpus in the stock as of the end of April 2020.

Nippon India Pharma has spread its bets wider, with the scheme increasing its allocation month-on-month over the past 3-4 months in companies such as Aurobindo Pharma, Lupin, Sun Pharmaceutical Industries and Cadila Healthcare.

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