India’s pharmaceutical industry has emerged as one of the strongest pillars of the economy ranking 3rd globally by volume and 11th by value, with over 3,000 companies and 10,500 manufacturing units.
Valued at nearly US$ 60 billion, the domestic pharma market is expected to grow to US$ 130 billion (bn) by 2030, because of rising healthcare demand, exports, and innovation.
This growth has also increased investor interest in pharma sector mutual funds, which invest in pharmaceutical, healthcare, and allied companies to capture sector-specific opportunities.
In this editorial, we explore the top 5 pharma mutual funds in India based on their 3-year and 5-year return performance.
Pharma Mutual Funds in India Based on 3-Year and 5-Year Returns
| Fund Name | 3-Year Return (%) | 5-Year Return (%) |
| ICICI Prudential Pharma Healthcare & Diagnostics (P.H.D) Fund | 28.61 | 21.16 |
| SBI Healthcare Opportunities Fund | 26.87 | 20.66 |
| UTI Healthcare Fund | 25.94 | 18.81 |
| Tata India Pharma & Healthcare Fund | 24.52 | 19.26 |
| DSP Healthcare Fund | 24.13 | 19.37 |
Source: Funds Factsheet
#1 ICICI Pru Pharma Healthcare & Diagnostics (P.H.D) Fund
The ICICI Prudential Pharma Healthcare and Diagnostics (P.H.D) Fund is an equity mutual fund.
The fund manages an Asset Under Management (AUM) of Rs 62.93 bn. The expense ratio stands at 1.05% for the direct plan and 1.87% for the regular plan.
From a risk and return perspective, the fund has a standard deviation of 16.38%, indicating moderate sector-specific volatility.
Its Sharpe ratio of 1.04 reflects healthy risk-adjusted returns, while a beta of 0.95 suggests the fund has moved largely in line with the broader market. The fund also has an average dividend yield of 1.08%.
How Does the Fund Invest?
The fund follows a healthcare-focused thematic strategy. Rather than offering broad diversification across sectors, it concentrates on healthcare-led businesses, with a growth-oriented investment style across large-cap, mid-cap, and emerging healthcare companies.
Sector Allocation
| Sector Name | Percentage Allocation (%) |
| Healthcare | 90.79% |
| Consumer Services | 4.63% |
| Financial Services | 1.14% |
| Chemicals | 1.06% |
| Government Securities | 0.03% |
| Other (Net Current Assets) | 2.35% |
Source: Fund Factsheet
Top Holdings
| Company | Portfolio Weightage (%) |
| Sun Pharmaceutical Industries Ltd. | 12.11% |
| Cipla Ltd. | 9.23% |
| Mankind Pharma Ltd. | 7.01% |
| Biocon Ltd. | 6.08% |
| Dr. Reddy’s Laboratories Ltd. | 5.97% |
Source: Fund Factsheet
The portfolio is relatively concentrated in leading pharmaceutical companies, reflecting its strong focus on established healthcare businesses.
How has the Fund Performed Over Time?
The fund is benchmarked against the BSE Healthcare TRI. Over the last year, it delivered a return of 1.13%, slightly below the benchmark return of 1.41%.
Rs 10,000 Investment Growth Comparison
| Period | Fund CAGR (%) | Benchmark CAGR (%) | Fund Value (Rs) | Benchmark Value (Rs) |
| 1 Year | 1.13% | 1.41% | Rs 10,113 | Rs 10,141 |
| 3 Years | 25.21% | 24.76% | Rs 19,640 | Rs 19,431 |
| 5 Years | 16.10% | 15.08% | Rs 21,100 | Rs 20,194 |
Source: Fund Factsheet
Over three years, the fund generated 25.21%, marginally outperforming the benchmark return of 24.76%. Over a five-year horizon, the fund delivered 16.10%, also outperforming the benchmark return of 15.08%.
If an investor had invested Rs 10,000 five years ago, it would have grown to approximately Rs 21,100, reflecting the fund’s ability to generate competitive long-term returns through focused exposure to India’s healthcare and pharmaceutical sectors.
#2 SBI Healthcare Opp Fund
The SBI Healthcare Opportunities Fund previously known as SBI Pharma Fund, the scheme primarily invests in pharmaceutical companies, hospitals, biotechnology firms, healthcare service providers, and medical equipment businesses to generate long-term capital appreciation.
The fund manages an Asset Under Management (AUM) of Rs 40.63 bn. From a risk and return perspective, the fund has a standard deviation of 14.71%, indicating moderate volatility within the healthcare segment.
Its Sharpe ratio of 1.08 reflects good risk-adjusted returns, while a beta of 0.84 suggests the fund has historically been less volatile than its benchmark.
How Does the Fund Invest?
The fund follows a bottom-up stock-picking approach, selecting fundamentally strong healthcare businesses across market capitalizations.
Its portfolio is diversified across large-cap, mid-cap, and small-cap healthcare stocks, with a notable tilt toward large-cap (35.59%) and mid-cap (32.89%) companies, while also maintaining some international exposure through American Depositary Receipts (ADRs).
Sector Allocation
| Sector Name | Percentage Allocation (%) |
| Healthcare | 94.19% |
| Chemicals | 3.56% |
| Consumer Services | 0.41% |
| Sovereign | 0.07% |
| Cash, Cash Equivalents & Others | 1.77% |
Source: Fund Factsheet
Top Holdings
| Company | Portfolio Weightage (%) |
| Sun Pharmaceutical Industries Ltd | 12.11% |
| Divi’s Laboratories Ltd | 6.59% |
| Acutaas Chemicals Ltd | 5.67% |
| Apollo Hospitals Enterprise Ltd | 5.48% |
| Max Healthcare Institute Ltd | 4.97% |
Source: Fund Factsheet
How has the Fund Performed Over Time?
The fund is benchmarked against the BSE Healthcare TRI. Over the last year, it delivered a return of 2.2% under the direct plan, outperforming the benchmark return of 1.4%.
Rs 10,000 Investment Growth Comparison
| Period | Fund CAGR (%) | Benchmark CAGR (%) | Fund Value (Rs) | Benchmark Value (Rs) |
| 1 Year | 2.20% | 1.40% | Rs 10,220 | Rs 10,141 |
| 3 Years | 25.45% | 24.79% | Rs 19,757 | Rs 19,432 |
| 5 Years | 17.55% | 15.09% | Rs 22,458 | Rs 20,195 |
Source: Fund Factsheet
Over a three-year period, the fund generated 25.45%, slightly ahead of the benchmark return of 24.79%. Over a five-year horizon, the fund delivered 17.55%, outperforming the benchmark return of 15.09%.
If an investor had invested Rs 10,000 five years ago, it would have grown to approximately Rs 22,458, showcasing the fund’s ability to generate competitive long-term returns through focused exposure to India’s expanding healthcare and pharmaceutical ecosystem.
#3 UTI Healthcare Fund
The UTI Healthcare Fund is an equity mutual fund that follows a thematic investment strategy. The fund manages an Asset Under Management (AUM) of Rs 11.43 bn.
Its portfolio is market-cap agnostic but currently carries a strong tilt toward mid-cap and small-cap healthcare companies.
From a risk and return perspective, the fund has a standard deviation of 13.23%, indicating relatively moderate volatility. Its Sharpe ratio of 1.48 reflects strong risk-adjusted returns, while a beta of 0.91 suggests slightly lower volatility compared to its benchmark.
How Does the Fund Invest?
The fund maintains a diversified healthcare portfolio across large-cap, mid-cap, and small-cap stocks, with a notable bias toward smaller companies, where long-term growth opportunities may be higher.
The allocation currently stands at 26% large-cap, 25% mid-cap, and 49% small-cap.
Sector Allocation
| Sector Name | Percentage Allocation (%) |
| Healthcare | 93% |
| Chemicals | 2% |
| Net Current Assets | 4.75% |
Source: Fund Factsheet
Top Holdings
| Company | Portfolio Weightage (%) |
| Sun Pharmaceuticals Industries Ltd. | 9.49% |
| Ajanta Pharma Ltd. | 5.84% |
| Lupin Ltd. | 4.23% |
| Apollo Hospitals Enterprise Ltd. | 3.54% |
| Divis Laboratories Ltd. | 3.45% |
Source: Fund Factsheet
The portfolio is diversified across major pharmaceutical manufacturers, hospital chains, and healthcare service providers, with moderate concentration in top holdings.
How has the Fund Performed Over Time?
The fund is benchmarked against the BSE Healthcare TRI. Over the last year, it delivered a return of 8.33%, outperforming the benchmark return of 6.27%.
Rs 10,000 Investment Growth Comparison
| Period | Fund CAGR (%) | Benchmark CAGR (%) | Fund Value (Rs) | Benchmark Value (Rs) |
| 1 Year | 8.33% | 6.27% | Rs 10,833 | Rs 10,627 |
| 3 Years | 24.93% | 25.35% | Rs 19,510 | Rs 19,708 |
| 5 Years | 13.99% | 14.33% | Rs 19,253 | Rs 19,542 |
Source: Fund Factsheet
Over 3 years, the fund generated 24.93%, slightly below the benchmark return of 25.35%. Over a 5-year horizon, the fund delivered 13.99%, marginally underperforming the benchmark return of 14.33%.
If an investor had invested Rs 10,000 five years ago, it would have grown to approximately Rs 19,253, reflecting the fund’s steady long-term exposure to India’s evolving pharmaceutical and healthcare sectors, particularly through its focus on mid-cap and small-cap opportunities.
#4 Tata India Pharma & Healthcare Fund
The Tata India Pharma and Healthcare Fund is an equity mutual fund that follows a thematic investment strategy, the fund manages an AUM of Rs 12.29 bn.
The expense ratio stands at 0.72% for the direct plan and 2.15% for the regular plan.
From a risk and return perspective, the fund has a standard deviation of 16.84%, indicating relatively high sector-specific volatility. Its Sharpe ratio of 0.81 reflects moderate risk-adjusted returns, while a beta of 0.91 suggests slightly lower volatility than its benchmark.
How Does the Fund Invest?
The fund maintains over 80% allocation to healthcare and pharma-related companies while diversifying across large-cap, mid-cap, and small-cap stocks.
The current portfolio has a strong tilt toward small-cap (39.74%) and large-cap (35.95%) companies, offering a blend of stability and growth potential.
Sector Allocation
| Sector Name | Percentage Allocation (%) |
| Healthcare | 94.04% |
| Chemicals | 5.03% |
| Financial Services | 0.62% |
Source: Fund Factsheet
Top Holdings
| Company | Portfolio Weightage (%) |
| Sun Pharmaceutical Industries Ltd. | 10.34% |
| Abbott India Ltd. | 5.89% |
| Divi Laboratories Ltd. | 5.83% |
| Healthcare Global Enterprises Ltd. | 5.39% |
| Max Healthcare Institute Ltd. | 5.14% |
Source: Fund Factsheet
The portfolio is diversified across leading pharmaceutical firms and healthcare providers, with a balanced mix of mature and emerging healthcare businesses.
How has the Fund Performed Over Time?
The fund is benchmarked against the BSE Healthcare TRI. Over the last year, the fund delivered weaker performance, with returns of -10.73% compared to the benchmark’s -5.81%.
Rs 10,000 Monthly SIP Growth Comparison
| Total Investment (Rs) | Fund CAGR (%) | Benchmark CAGR (%) | Fund Value (Rs) | Benchmark Value (Rs) |
| Rs 1,20,000 | -10.73% | -5.81% | Rs 1,12,972 | Rs 1,16,228 |
| Rs 3,60,000 | 7.62% | 11.53% | Rs 4,03,807 | Rs 4,27,606 |
| Rs 6,00,000 | 11.84% | 14.28% | Rs 8,07,450 | Rs 8,57,609 |
Source: Fund Factsheet
Over three years, the fund generated 7.62%, underperforming the benchmark return of 11.53%. Over a five-year horizon, the fund delivered 11.84%, also trailing the benchmark return of 14.28%.
If an investor had systematically invested Rs 10,000 every month over five years, the corpus would have grown to approximately Rs 8.07 lakh. While the fund has benefited from long-term healthcare sector growth, its recent historical returns have remained below benchmark performance.
#5 DSP Healthcare Fund
The DSP Healthcare Fund is an equity mutual fund that follows a thematic investment strategy focused on the pharmaceutical and healthcare sectors.
The fund manages an Asset Under Management (AUM) of Rs 31.42 bn. The expense ratio stands at 0.62% for the direct plan and 2.22% for the regular plan.
From a risk and return perspective, the fund has a standard deviation of 15.15%, indicating moderate-to-high sectoral volatility.
Its Sharpe ratio of 0.85 reflects balanced risk-adjusted returns, while a beta of 0.84 suggests lower volatility compared to its benchmark.
How Does the Fund Invest?
The fund maintains a diversified market-cap allocation with a notable bias toward small-cap healthcare companies, which currently account for 41.8% of the portfolio.
Additionally, the fund includes global healthcare exposure of up to 25%, allowing investors to benefit from international healthcare opportunities alongside domestic sector growth.
Sector Allocation
| Sector/Category | Percentage Allocation (%) |
| Pharmaceuticals & Biotechnology | 65.24% |
| Indian Equity | 79.60% |
| Global Equity | 18.00% |
| Debt & Others | 2.40% |
Source: Fund Factsheet
Top Holdings
| Company | Portfolio Weightage (%) |
| Sun Pharmaceutical Industries Limited | 8.80% |
| IPCA Laboratories Limited | 8.30% |
| Cipla Limited | 7.60% |
| Laurus Labs Limited | 6.40% |
| Sai Life Sciences Limited | 6.10% |
Source: Fund Factsheet
The portfolio is diversified across major pharmaceutical players, healthcare providers, and diagnostics companies, with a mix of domestic leaders and growth-focused businesses.
How has the Fund Performed Over Time?
The fund is benchmarked against the BSE Healthcare TRI. Over the last year, it delivered a return of 4.87%, slightly below the benchmark return of 6.27%.
Rs 10,000 Investment Growth Comparison
| Period | Fund CAGR (%) | Benchmark CAGR (%) | Fund Value (Rs) | Benchmark Value (Rs) |
| 1 Year | 4.87% | 6.27% | Rs 10,487 | Rs 10,627 |
| 3 Years | 21.77% | 25.30% | Rs 18,086 | Rs 19,710 |
| 5 Years | 13.64% | 14.33% | Rs 18,955 | Rs 19,545 |
Source: Fund Factsheet
Over three years, the fund generated 21.77%, underperforming the benchmark return of 25.30%. Over a five-year horizon, the fund delivered 13.64%, also marginally below the benchmark return of 14.33%.
If an investor had invested Rs 10,000 five years ago, it would have grown to approximately Rs 18,955. While the fund offers diversified exposure to both domestic and global healthcare opportunities, its recent performance has remained slightly below benchmark returns over medium-term periods.
Which Pharma Mutual Funds Are Best in India?
Pharma sector mutual funds offer investors exposure to India’s expanding healthcare and pharmaceutical ecosystem.
While these funds can benefit from long-term sectoral growth, performance may vary based on market cycles and portfolio strategy.
Investors should carefully evaluate returns, risk metrics, and sector concentration before considering pharma mutual funds for their portfolio.
Happy investing.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here…
The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary