Which mutual funds to invest in 2023 to play the Pharma theme?
Investing in mutual funds has become an increasingly popular choice among Indians, as they offer an opportunity to diversify one’s portfolio without the requirement of expertise in capital markets. For instance, investing in mutual funds for Indian Pharma Companies such as Cipla, Dr. Reddy, Divis Lab, SunPharma and others, is a potential lucrative option. Mutual funds offer a number of benefits that can appeal to investors, irrespective of their investment goals.
In this article, we will discuss more about the pharma theme and the best mutual funds to invest in 2023:
Difference between Pharma stocks and Pharma mutual funds:
On the surface, pharma mutual funds may appear closely related to pharmaceutical stocks, but the two are distinct.
Investing in pharma stocks simply means buying a few stocks of different pharma companies in India. Pharma mutual funds on the other hand are actually a type of sector fund, which means they invest into stocks of multiple pharma companies which covers the entire sector and its related industries.
Pharma mutual funds have a much broader focus on stocks from the pharma industry as compared to those investing directly in pharma stocks. Hence, investing in mutual funds is a better option than direct investing, it is also important to understand the associated risks and potential rewards before you select the mutual funds to invest in.
Risk and Rewards of investing in Pharma mutual funds:
The potential rewards of investing in pharma mutual funds are relatively impressive. Unlike pharmaceutical stocks which may be significantly impacted by macroeconomic factors, the pharma industry is uniquely resilient to such influences. As such, investing in this sector provides investors the opportunity to capitalize on large returns while minimizing their risk of financial loss.
Furthermore, since pharma mutual funds are composed of many stocks from the pharma sector, they provide investors with a more diversified portfolio than traditional pharmaceutical stocks.
When it comes to potential risks associated with investing in pharma mutual funds, investors need to be mindful of the fact that these investments are relatively high risk. As with any other investment, there is no guarantee of returns, and the prices of stocks are highly volatile, often fluctuating erratically. Additionally, many pharma stocks are susceptible to inter-market competition and the introduction of new drugs and technology, so investors should be aware of the environmental aspects of the market that could have an impact on their investments.
Top Pharma Mutual Funds to Invest in 2023:
Below are the top Pharma mutual funds to invest in India in 2023:
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Nippon India Pharma Fund (G)
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ICICI Pru P.H.D Fund (G)
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Mirae Asset Healthcare Fund - Regular (G)
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SBI Healthcare Opportunities Fund (G)
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DSP Healthcare Fund (G)
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UTI-Healthcare Fund (G)
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Tata India Pharma & Healthcare Fund (G)
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Aditya Birla SL Pharma & Healthcare Fund (G)
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ITI Pharma and Healthcare Fund (G)
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IDBI Healthcare Fund (G)
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Conclusion:
In conclusion, pharma mutual funds can be a particularly attractive investment opportunity for those looking for higher long-term returns. With supplemental risk-management tactics, investors may be able to benefit from reduced volatility and enjoy much larger returns due to the diversification of their portfolio. However, potential investors should always remain aware of the risks involved and ensure that they have done the necessary due diligence to ensure a sensible investment strategy.
