What Are the Chances of Tata India Pharma & Healthcare Fund to Grow in Future?

Tata India Pharma & Healthcare Fund was launched on 28th Dec 2015 with an aim to generate capital appreciation for the investors by investing 80% to 100% in equity & equity related instruments and 0 to 20% in debt & money market instruments. The fund focuses on investment in Pharma & healthcare companies in India. Currently, Mr Sailesh Jain and Ms Meeta Shetty are handling the portfolio of Tata India Pharma & Healthcare Fund since Nov 2018. As Tata India Pharma & Healthcare Fund is a thematic fund which invests majorly in Pharma sectors, it makes the portfolio of the fund risky. Since launch, the fund has generated an annulised rate of returns at -4.01% because of underperformance of the Pharma & Healthcare sectors due to many reasons.

The experts at MySIPonline have analysed the fund and find out the chances of fund’s growth in future considering the following factors.

Mid-cap Investment

The fund has a well-diversified portfolio where the fund managers invest around 41.07% in mid-cap companies. Such a big portion of assets in mid-cap companies show that the fund has high growth chances in future. Although mid-cap companies also increase volatility to the portfolio, we can expect that with a growing Pharma sector, the mid-cap companies of Pharma will start growing and producing favourable returns.

Stable Portfolio

Sticking to the investment objective, the fund managers invest around 94.52% assets in equity and the remaining in the cash equivalent. From the equity instruments, Tata India Pharma & Healthcare Fund (G) invests approximately 50% of the assets in stocks of large-cap companies which bring stability to the portfolio. Although due to Pharma sector’ slowdown, the fund does not perform accordingly, with the improvement of the Pharma sector, the fund will start growing as well.

Improving Pharma & Healthcare Sector

Since 2015, the Pharma sector has been underperforming due to US FDA strict regulations and slowdown in exports. Further, GST regulations have also impacted the Pharma sector; however, now the saturation is coming to the Pharma sector. With the resilience in the US FDA regulation and approval to exports, we can expect that Tata India Pharma & Healthcare Fund will start growing.

Sun Pharma Gets USFDA Nod

Tata India Pharma & Healthcare Fund has a prominent assets allocation in Sun Pharma (around 15%). Recently in 2018, Sun Pharma received the US FDA (Food and Drug Administration) approval) in cancer treatment injection, prostate cancer drug, plaque psoriasis drug, and eye drug Xeplros. The approval of drugs to the US shows increasing product range of Sun Pharma and future growth of Tata India Pharma & Healthcare Fund. Some other top holdings such as Dr Reddy’s Lab, Abbott India, Aurobindo Pharma are showing improvement which may help Tata India Pharma & Healthcare Fund to grow in the future.

Last One-year Performance

The scheme was launched in Dec 2018, so we have a record of 1 to 2-years performance only. We couldn’t track the record of last 3, 5, and 10-years returns of the scheme. Considering the previous 1-year returns, the fund has generated 6.23% returns which are higher than the category’s average and benchmark. In 2017, the fund has shown positive returns against a negative benchmark.

Overall, the experts at MySIPonline have discussed the chances of Tata India Pharma & Healthcare Fund to grow in future. If you have any query regarding the regular plan, you can mention in the below-provided link to get assistance from experts at MySIPonline ASAP.  https://goo.gl/WofRJm