There are so many categories in Mutual fund categories. As per expert opinion some times Thematic or Sectorial funds are profitable and same times Thematic & Sectorial fund known as extremely risky funds Because in this funds almost 80% of investments is done according to the theme of related companies. Thematic funds most biggest missing thing is that its diversification is completely absent. Because here the investments are not done in various sectors of company. For Example, if it is IT fund then the investment is done in the IT companies or if its Banking fund then the investment is done in the banking stocks only.
Thematic or sectorial funds another biggest disadvantage is that its cyclical. The economic system worldwide or system of a particular country, it is seen that certain sectors do well over a period and There is no such sector who grow persistently. Hence, at the specific period if the sector we have chosen to invest is going downwards then returns from this sectorial funds also low.
Pharms and Healthcare Funds after Covid-19
Thematic or Sectorial funds have kind of category that’s Pharms and Healthcare! In the period from 2016 to 2019 the result of these funds have been extremely disappointing. Eventually after 2019, that is from the time covid-19 pandemic has hit this world, this funds have reborn. In 2020 S&P, BSE, Healthcare index has increased by 61%. In the same year the sensex has been increased to 18%, that is the healthcare Index raised four time of the sensex and are registered from all these index nearly all companies sectors have highly increased but yet the below five companies have doubled the profit of there shares holders in the year 2020.
| Sr.No | Company Name | Returns in 2020 |
|---|---|---|
| 1 | Aarti Drugs | 506% |
| 2 | Granules India | 201% |
| 3 | Divis Laboratories | 104% |
| 4 | JBKM | 141% |
| 5 | J.B.Chemicals & Pharma | 101% |
Pharma or Healthcare funds have brought to their investors attention this year and this is the reason beacause this funds invest in these companies and hence their working have been raised up from 2019. Pharma and Healthcare funds have almost returned 70% back in this one year. The most excellent sector for funds of Pharma have been listed in the below table.
| Sr.No | Fund Name | 1 Year Returns |
|---|---|---|
| 1 | DSP Healthcare Funds | 66% |
| 2 | Mirae Asset Healthcare Fund | 61% |
| 3 | ICICI Pru Pharma Healthcare and Diagnostics (P.H.D) Fund | 56% |
| 4 | SBI Healthcare Opportunity Fund | 55% |
| 5 | Nippon India Pharma Fund | 55% |
In todays covid pandemic the whole world is facing the second wave this time, which proving terrible especially in country like India. Besides the WHO (World Health Organization) has also pointed the third wave of Covid-19. Hence, the people have been acquainted with the health system. The Vaccine and supportive medicines made by various companies are sold in large numbers. Looking towards this situation almost for 2 years pharma sector will out preform the same way.
There is doubt. Investors taking into account 1 to 3 years should invest in this. But before investing it they should see the economic capacity, risk and then decide the profit rate of their investments.
To find out which companies are investing in this fund we have given top ten holdings in DSP healthcare fund.
| Sr.No | Company Name | Allocation |
|---|---|---|
| 1 | Sun Pharma | 8.77% |
| 2 | Cipla | 8.69% |
| 3 | Lupin | 7.23% |
| 4 | Dr.Reddy’s Lab | 6.99% |
| 5 | Ipca Lab | 6.72% |
| 6 | Divi’s Lab | 5.52% |
| 7 | Apollo Hospital | 5.54% |
| 8 | Max Healthcare | 4.9% |
| 9 | Merck | 4.39% |
| 10 | Intuitive Surgical Inc (USA) | 3.23% |
Conclusion
According to Knowledgeable people, investors should not invest more than 10% in thematic and sectorial funds.
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