HDFC Mutual Fund on September 14, 2023 launched the HDFC Pharma and Healthcare Fund. It is an open-ended sectoral and/or thematic scheme that will invest in equity and equity-related securities of companies within the pharma and healthcare industry.
The new fund offer (NFO) will close on September 28, 2023. The scheme will again re-open for continuous sale and repurchase within five business days from the date of allotment. Investors can invest in this fund with a minimum investment of Rs 100 and in multiples of Re 1. The fund’s performance will be measured against the S&P BSE Healthcare Index.
There will be an exit load of 1 per cent if the units are redeemed or switched within a year of allotment. After that, there will be no exit load.
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HDFC Pharma And Healthcare Fund
This fund will maintain an allocation of over 80 per cent in stocks of companies within the pharma and healthcare sector. The balance 20 per cent can be allocated to debt instruments or equity instruments in other sector. A total of 10 per cent can also be invested in units of real estate investment trusts (Reits) or infrastructure investment trusts (Invits).
According to HDFC Mutual Fund, the healthcare industry’s broad spectrum, including pharmaceuticals, hospitals, healthcare service providers, healthcare research, analytics and technology, and medical equipment and supplies, presents ample diversification opportunities for investors across all market capitalisation.
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The domestic pharmaceutical sector has shown a compounded annualised growth rate (CAGR) of approximately 11 per cent from FY12 to FY22 and this trend is expected to continue over the next five years. India’s healthcare spend as a percentage of gross domestic product (GDP) is among the lowest globally. This indicates significant room for expansion and growth in the sector, it said.
“Private healthcare expenditure has been on the rise, with its share in Private Final Consumption Expenditure (PFCE) steadily increasing over last 10 years. This rise in expenditure also provides room for growth,” the fund house said.
Also, domestic healthcare is expected to rise on account of rising longevity and growing elderly population. Besides, rising chronic diseases will also lead to a demand for medicines and higher margins for companies, it said.
Incidentally, India has the second highest share of US Food and Drug Administration (USFDA)-approved facilities, and the manufacturing competitiveness has also improved with the introduction of PLI scheme and low labour cost.
