InvestorQ : Is it true that pharma funds have done best in the last one year among all the mutual funds?
Priyanka N made post

Is it true that pharma funds have done best in the last one year among all the mutual funds?

Answer
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Neelam Naik answered.
2 months ago


Pharma funds have outperformed and they have outperformed by a huge margin in the last on year. For example, the pharma funds category topped the return charts with over 58% average returns in the last one year. Best returns were as high as 70% in a year.

The outcome was that the pharma funds even outpaced gold mutual funds which grew 37% in the same time period. The sharp spike in pharma was most pronounced in the last 4 months since the last week of March, when the rally in pharma stocks started.

Even the benchmark index for pharma funds on the National Stock Exchange, Nifty Pharma Index, grew by 51.5% in the last one year. The returns on the pharma fund have been largely driven by a more favorable US FDA response and the race to find COVID vaccine.

Pharma funds in India manage close to Rs.9035 crore, with Nippon Pharma Fund alone accounting for over 60% of the overall sectoral corpus. Over the last one year, Pharma funds have outdone the Nifty and all the other sector/thematic funds by a margin.

However, it needs to be remembered that these phenomenal returns are only for the last one year period. If one were to look at the same pharma funds over a 5 year period, then the IRR returns are just about 5.5% on an average with the best performer giving 8%.